Gildan Active wear Inc specializes in manufacturing and selling T shirts
Gildan Active wear Inc. specializes in manufacturing and selling T-shirts, sport shirts, and fleece. The following is adapted from a recent statement of financial position dated September 30, 2012. Amounts are in thousands of dollars:
Assume that the following transactions occurred in the first quarter of fiscal year 2013, ended on December 31, 2012:
a. Received $ 630 on sale of intangibles at cost.
b. Paid $ 14,000 in principal on long-term debt.
c. Purchased $ 3,400 in non- current investments for cash.
d. Sold equipment at its cost for $ 600 cash.
e. Purchased additional intangibles for $ 5,400 cash.
f. Issued additional shares for $ 1,500 in cash.
g. Purchased property, plant, and equipment; paid $ 12,450 in cash and $ 9,400 with additional long-term bank loans.
h. Sold other non- current assets at cost for $ 310 cash.
i. Declared and paid $ 9,000 in dividends to shareholders.
1. Create a T- account for each of the accounts on the statement of financial position; enter the balances at September 30, 2012.
2. Record each of the transactions for the first quarter ended December 31, 2012, in a T-account (including referencing) and determine the ending balances.
3. Prepare a classified statement of financial position at December 31, 2012.
4. Compute the current ratio at December 31, 2012. What does this suggest about Gildan Active wear?
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