1. Fish Co. has been operating for 2 years. At the beginning of 2022, the company...

Transcribed Image Text:

1. Fish Co. has been operating for 2 years. At the beginning of 2022, the company had the following account balances: Cash Equipment Building Accounts payable Land Inventory Notes payable (short term) $ 45,000 40,000 250,000 12,000 15,000 43,000 10,000 70,000 20,000 135,000 Additional paid-in-capital (APIC) 146,000 During 2022, the company had the following transactions: a. Purchased inventory for $40,000 on account Notes payable (long-term) Common stock ($.50 par value) Retained earnings b. Borrowed $100,000 and signed a two-year note payable c. Purchased equipment for $14,000 d. Issued 5,000 shares to investors for $27,500 e. Paid for the inventory purchased in a. above f. Paid the short-term note payable (ignore interest) g. Declared a dividend of $0.10 per share Required: a. Prepare journal entries for each of the above transactions. For each entry indicate the effect (↑↓). b. Set up a t-account for each account and enter the opening balances at 1/1/22. c. Post the 2022 transactions to the t-accounts and calculate the balance for each account. d. Prepare a trial balance at 12/31/2022. e. Prepare a classified balance sheet at December 31, 2022 (use text exhibit 2.9). f. Calculate the current ratio. Round to 2 decimal places. 1. Fish Co. has been operating for 2 years. At the beginning of 2022, the company had the following account balances: Cash Equipment Building Accounts payable Land Inventory Notes payable (short term) $ 45,000 40,000 250,000 12,000 15,000 43,000 10,000 70,000 20,000 135,000 Additional paid-in-capital (APIC) 146,000 During 2022, the company had the following transactions: a. Purchased inventory for $40,000 on account Notes payable (long-term) Common stock ($.50 par value) Retained earnings b. Borrowed $100,000 and signed a two-year note payable c. Purchased equipment for $14,000 d. Issued 5,000 shares to investors for $27,500 e. Paid for the inventory purchased in a. above f. Paid the short-term note payable (ignore interest) g. Declared a dividend of $0.10 per share Required: a. Prepare journal entries for each of the above transactions. For each entry indicate the effect (↑↓). b. Set up a t-account for each account and enter the opening balances at 1/1/22. c. Post the 2022 transactions to the t-accounts and calculate the balance for each account. d. Prepare a trial balance at 12/31/2022. e. Prepare a classified balance sheet at December 31, 2022 (use text exhibit 2.9). f. Calculate the current ratio. Round to 2 decimal places.

Answer rating: 100% (QA)

a Journal entries for each transaction a To record the purchase of inventory on account Inventory 40000 Accounts Payable 40000 b To record borrowing 1... View the full answer