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.
Required:
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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BAYER AG Statement of Financial Position At September 30, 2012 (in millions of euros) ASSETS Current assets Cash and cash equivalents Receivables E 3,181 8,644 6,539 1,514 19.878 Other assets Non-current assets Investments Property, plant, and equipment Intangible assets Other assets 319 9,480 19,477 2767 32,043 51,921 Total assets LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Trade accounts payable Financial liabilities Provisions Other short-term liabilities 3,397 3,721 4,593 1,502 13,213 Non-current liabilities Provisions Deferred inoome taxes Financial liabilities Other liabilities 7.524 2,401 7,521 2.254 19,700 Shareholders' equity Contributed capital Retained earnings 8,284 10,724 19,008 51,921 Total liabilities and shareholders' equity