Ethan Allen Interiors, Inc., is a leading manufacturer and retailer of home furnishings in the United States and abroad. The following is adapted from Ethan Allen's recent annual financial report (fiscal year ending on June 30). Amounts are in thousands

Assume that the following events occurred in the first quarter ended September 30 of the next fiscal year. a. Issued 1,600 additional shares of stock for %1 ,020 in cash. b. Purchased $3,400 in additional intangibles for cash. c. Ordered $43,500 in wood and other raw materials for the manufacturing plants. d. Sold equipment at ts cost for $4,020 cash. e. Purchased $2,980 in short-term investments for cash. f. Purchased property, plant, and equipment; paid $ 1,830 in cash and signed additional long-term notes for $9,400 g. Sold at cost other assets for $310 cash. h. Declared $300 in dividends.

Required:

1. Create T-accounts for each of the accounts on the balance sheet, including a new account Dividends Payable; enter the balances at June 30 as the beginning balances for the quarter.

2. Record each of the transactions for the first quarter ended September 30 in the T-accounts (including referencing) and determine the ending balances

3. Explain your response to event (c)

4. Prepare a trial balance at September 30.

5. Prepare a classified balance sheet at September 30.

6. Compute the current ratio for the quarter ended September 3C What does this suggest about Ethan Allen Interiors, Inc?

Transcribed Image Text:

Cash and cash equivalents Short-term investments Accounts receivable Inventories Prepaid expenses and other current assets Property, plant, and equipment Intangibles Other assets Accounts payable Accrued expenses payable Long-term debt (includes the current portion of $19) Other long-term liabilities Common stock ($0.01 par value) Additional paid-in capital Retained earnings Other stockholders' equity items $78,519 12,909 15,036 141,692 20,372 294,853 45,128 19,816 $ 26,958 127,639 165,032 27,009 484 359,728 501,908 (580,433) Cash and cash equivalents Short-term investments Accounts receivable Inventories Prepaid expenses and other current assets Property, plant, and equipment Intangibles Other assets Accounts payable Accrued expenses payable Long-term debt (includes the current portion of $19) Other long-term liabilities Common stock ($0.01 par value) Additional paid-in capital Retained earnings Other stockholders' equity items $78,519 12,909 15,036 141,692 20,372 294,853 45,128 19,816 $ 26,958 127,639 165,032 27,009 484 359,728 501,908 (580,433)

Answer rating: 100% (QA)

Collection of an entire group of similar accounts in double entry bookkeeping Also called book of final entry a ledger record classified and summarize... View the full answer