Required information

P2-5 (Algo) Recording Transactions, Preparing Journal Entries, Posting to T-Accounts, Preparing the Balance Sheet, and Evaluating the Current Ratio LO2-2, 2-4, 2-5

Skip to question

[The following information applies to the questions displayed below.]

Orange Incorporated, headquartered in Cupertino, California, designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related services. The following is Orange's (simplified) balance sheet from a recent year (fiscal year ending on the last Saturday of September).

ORANGE INCORPORATED
CONSOLIDATED BALANCE SHEET
September 28, 2019
(dollars in millions)
ASSETS
Current assets:
Cash	$13,934
Short-term investments	11,305
Accounts receivable	17,571
Inventories	2,123
Other current assets	24,018
Total current assets	68,951
Long-term investments	130,960
Property, plant, and equipment, net	20,750
Other noncurrent assets	12,600
Total assets	$233,261
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts payable	$30,382
Accrued expenses	18,567
Unearned revenue	8,545
Short-term debt	6,347
Total current liabilities	63,841
Long-term debt	29,167
Other noncurrent liabilities	28,028
Total liabilities	121,036
Stockholders equity:
Common stock ($0.00001 par value)	1
Additional paid-in capital	24,112
Retained earnings	88,112
Total stockholders equity	112,225
Total liabilities and shareholders' equity	$233,261

Assume that the following transactions (in millions) occurred during the next fiscal year (ending on September 26, 2020):

1. Borrowed $18,281 from banks due in two years.
2. Purchased additional investments for $22,400 cash; one-fifth were long term and the rest were short term.
3. Purchased property, plant, and equipment; paid $9,586 in cash and signed a short-term note for $1,425.
4. Issued additional shares of common stock for $1,484 in cash; total par value was $1 and the rest was in excess of par value.
5. Sold short-term investments costing $19,023 for $19,023 cash.
6. Declared $11,140 in dividends to be paid at the beginning of the next fiscal year.

P2-5 Part 2

Required:

2. Post each transaction to the appropriate T-accounts.

Note: Enter your answers in millions.

\begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ Cash } \\ \hline \multicolumn{2}{|c|}{ Debit } & \multicolumn{2}{|r|}{ Credit } \\ \hline Beginning Balance & 13,934 & & \\ \hline (a) & 18,281 & & \\ \hline (b) & & 22,400 & \\ \hline(c) & & 9,586 & \\ \hline (d) & 1,484 & & r \\ \hline (e) & 19,023 & & \\ \hline Ending Balance & 20,736 & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Accounts Receivable } \\ \hline \multicolumn{2}{|c|}{ Debit } & \multirow[t]{2}{*}{ Credit } \\ \hline Beginning Balance & 17,571 & \\ \hline T & & P \\ \hline & & \\ \hline Ending Balance & 17,571 & \\ \hline \multicolumn{3}{|c|}{ Other Current Assets } \\ \hline Deb & & Credit \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Short-term Investments } \\ \hline \multicolumn{2}{|c|}{ Debit } & \multirow[t]{2}{*}{ Credit } \\ \hline Beginning Balance & 11,305 & \\ \hline \multicolumn{3}{|l|}{ (b) } \\ \hline \multicolumn{3}{|c|}{1} \\ \hline \multicolumn{3}{|l|}{7} \\ \hline Ending Balance & 11,305 & \\ \hline \multicolumn{3}{|c|}{ Inventories } \\ \hline \multicolumn{2}{|c|}{ Debit } & \multirow[t]{2}{*}{ Credit } \\ \hline Beginning Balance & 2,123 & \\ \hline \\ \hline \\ \hline Ending Balance & 2,123 & \\ \hline \multicolumn{3}{|c|}{ Long-term Investments } \\ \hline Debi & & Credit \\ \hline \end{tabular}