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Class:
Debit
Credit
Example:
Reference Account
a Cash
Equipment
Debit
Credit
$
100
$
100
Requirement 1:
Ref.
Beg.
Beg.
CASH
-
NOTES RECEIVABLE
$
-
Beg.
Beg.
EQUIPMENT
-
LAND
-
Ref.
Ref.
NOTES PAYABLE
$
-
Ref.
Beg.
Ref.
COMMON STOCK
$
-
ADDITIONAL PAID-IN
CAPITAL
$
-
Ref.
Beg.
Beg.
Requirement 2:
Using the balances in the T-accounts, fill in the following amounts for the accounting equation:
Assets
= Liabilities
Requirement 3:
Explain your response to events (c) and (f).
+ Stockholders' Equity
13,852
966
9,803
1,404
3,423
29,448
2,124
3,404
9,557
44,533
11,656
10,345
22,001
13,615
35,616
34
12,153
28,236
(31,506)
8,917
44,533
50
300
13,000
875
1,410
400
11,000
11,000
60
Assume that the following transactions (in millions) occurred during the remainder of
2012 (ending on February 1, 2013):
a. Borrowed $50 from banks due in two years.
b. Lent $300 to affiliates, who signed a six-month note.
c. Purchased additional investments for $13,000 cash; one-fifth were long term and the
rest were short term.
d. Purchased property, plant, and equipment; paid $875 in cash and $1,410 with
additional long-term bank loans.
e. Issued 1,000 additional shares of stock for $400 in cash.
f. Sold short-term investments costing $11,000 for $11,000 cash.
g. Dell does not actually pay dividends; it reinvests its earnings into the company for
growth purposes. Assume instead for this problem that Dell declared and paid $60 in
dividends during 2012.
Required:
1. Prepare a journal entry for each transaction. Use the account titles in the Dell balance
sheet.
2. Create T-accounts for each balance sheet account and include the February 3, 2012,
balances. Post each journal entry to the appropriate T-accounts.
3. Prepare a balance sheet from the T-account ending balances for Dell at February 1,
2013, based on these transactions.
4. Compute Dell's current ratio for 2012 (year ending on February 1, 2013). What does
this suggest about the company?
Requirement 1:
Reference Account
Debit
Credit
Example:
Reference Account
a Cash
Equipment
Debit
Credit
$
100
$
100
Requirement 2:
Ref.
Beg. $
Cash
13,852
13,852
Short-term investments
966
Beg. $
966
Beg. $
Beg. $
9,803
Inventories
1,404
1,404
3,423
Ref.
Ref.
Accounts payable
Ref.
$
11,656 Beg.
Additional paid-in
capital
10,345
Long-term liabilties
$
13,615 Beg.
Common stock
11,656
Other short-term
obligations
$
10,345 Beg.
Ref.
Retained earnings
13,615
Other stockholders'
equity
31,506
Beg. $
2,124
Long-term investments
3,404
Beg. $
3,404
9,557
Common stock
Ref.
$
34 Beg.
34
Additional paid-in
capital
$
12,153 Beg.
12,153
Retained earnings
$
28,236 Beg.
28,236
Other stockholders'
equity
(31,506)
Student Name:
Class:
Problem 02-05
Requirement 3:
DELL, INC.
Balance Sheet
at February 1, 2013
(in millions)
Assets
Current Assets:
Cash
Short-term investments
Receivables and other assets
Inventories
Other current assets
Total current assets
Property, plant and equipment
Long-term investments
Other non-current assets
Total assets
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable
Other short-term obligations
Total current liabilities
Long-term Liabilities
Total liabilities
Stockholders' Equity
Common stock
Additional paid-in capital
Retained earnings
Other stockholders' equity items
Total stockholders' equity
Total liabilities and stockholders' equity
Requirement 4:
Current Ratio