Bayer AG with headquarters in Leverkusen Germany is an international
Bayer AG, with headquarters in Leverkusen, Germany, is an international, research-based group of companies active in health care, nutrition, and high-tech materials. Popular products include ASPIRIN, Alka-Seltzer, and One-A-Day vitamins. The following is Bayer’s (simplified) statement of financial position as at September 30, 2012:
Assume that the following transactions occurred in the last quarter of 2012:
a. Issued additional shares for € 60 in cash.
b. Borrowed € 615 from banks due in two years.
c. Declared and paid € 1,160 in dividends to shareholders.
d. Purchased additional intangibles for € 64 cash.
e. Purchased property, plant, and equipment; paid € 1,514 in cash and € 5,410 with additional long-term bank loans.
f. Acquired additional investments; paid € 623 in cash.
g. Lent € 125 to an associated company that signed a six-month note.
h. Sold investments costing € 461 for the same amount in cash.
1. Prepare a journal entry for each transaction. 2. Create a T-account for each financial statement account and include the September 30, 2012, balances. Post each journal entry to the appropriate T-accounts.
3. Prepare a statement of financial position for Bayer based on the T-account ending balances at December 31, 2012.
4. Compute Bayer’s current ratio at December 31, 2012. What does this suggest about the company?
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