Question

Dell Inc. is a leading global provider of computer products and services for both the consumer and enterprise markets. Dell offers a full line of desktop and notebook PCs, network servers, workstations, storage systems, printers, handheld computers, digital music players, LCD and plasma televisions, and projectors. The following is Dell’s (simplified) statement of financial position from a recent year:
Assume that the following transactions (in millions of dollars) occurred in fiscal year 2013 (ending on February 2, 2013):
a. Issued additional shares for $ 200 in cash.
b. Borrowed $ 300 from banks; due in two years.
c. Purchased additional investments for $ 7,500 cash; one- fifth were long term and the rest were short term.
d. Purchased property, plant, and equipment; paid $ 4,650 in cash and $ 850 with additional long-term bank loans.
e. Lent $ 250 to associated companies that signed a six- month note.
f. Sold short- term investments costing $ 5,000 for $ 5,000 cash.
Required:
1. Prepare a journal entry for each transaction.
2. Create a T- account for each item on the statement of financial position and include the February 3, 2012 balances. Post each journal entry to the appropriate T- account.
3. Prepare a statement of financial position for Dell based on the T- account ending balances at February 2, 2013.
4. Compute Dell’s current ratio for fiscal year 2013. What does this suggest about the company?


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  • CreatedAugust 04, 2015
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