Question

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 [The following information applies to the questions displayed below.) Mango Inc., headquartered in Cupertino, California, designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players and sells a variety of related software and services. The following is Mango's (simplified) balance sheet from a recent year (fiscal year ending on the last Saturday of September). MANGO INC. CONSOLIDATED BALANCE SHEET September 30, 2017 (dollars in millions) ASSETS Current assets: Cash $ 13,924 Short-term investments 11,297 Accounts receivable 17,559 Inventories 2,122 Other current assets 24,007 Total current assets 68,909 Long-term investments 130,880 Property, plant, and equipment, 20,737 net Other noncurrent assets 12,592 Total assets $ 233,118 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 30,363 Accrued expenses 18,555 Unearned revenue 8,539 Short-term notes payable 6,343 Total current liabilities 63,800 Long-term debt 29,148 Other noncurrent liabilities 28,010 Total liabilities 120,958 Stockholders' equity: Common stock ($0.00001 per 1 value) Additional paid-in capital 23,912 Retained earnings 88,247 Total stockholders' equity 112,160 Total liabilities and $233,118 shareholders' equity

Assume that the following transactions (in millions) occurred during the next fiscal year (ending on September 29, 2018):

1. Borrowed $18,279 from banks due in two years.
2. Purchased additional investments for $22,200 cash; one-fifth were long term and the rest were short term.
3. Purchased property, plant, and equipment; paid $9,584 in cash and signed a short-term note for $1,422.
4. Issued additional shares of common stock for $1,481 in cash; total par value was $1 and the rest was in excess of par value.
5. Sold short-term investments costing $19,021 for $19,021 cash.
6. Declared $11,138 in dividends to be paid at the beginning of the next fiscal year.

1. Prepare a journal entry for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions.)

2. Post each transaction to the appropriate T-accounts (Enter your answers in millions.)

3. Prepare a trial balance for the period ended September 29, 2018. (Enter your answers in millions.)

4. Prepare a classified balance sheet for Mango at September 29, 2018, based on these transactions. (Enter your answers in millions.)

Answer 1

1) journal entry:
Date	Acc titles	Debit $	Credit $
1	Cash	18279
	Long term debt		18279
	(borrowed from banks for two years)
2	Long term investment	4440
	Short term investment	17760
	Cash		22200
	(investment on short / long term)
3	Property, plant and equipment	11006
	Cash		9584
	Short term notes payable		1422
	(PPE purchased of cash and issuing notes)
4	Cash	1481
	Common Stock		1
	Additional paid in capital		1480
	(issue of common stock with total par $1)
5	Cash	19021
	Short term investment		19021
	(sold investment at par)
6	Dividend	11138
	Dividend payable		11138
	(declared dividend payable next fiscal)

2) T-Accounts:
DEBIT	AMOUNT $	CREDIT	AMOUNT $
Cash
OB	13924	2	22200
1	18279	3	9584
4	1481	CB	20921
5	19021
Long term Debt
CB	47427	OB	29148
		1	18279
Long term investment
OB	130880	CB	135320
2	4440
Short term investment
OB	11297	5	19021
2	17760	CB	10036
Property, plant and equipment
OB	20737	CB	31743
3	11006
Short term notes payable
CB	7765	OB	6343
		3	1422
Common Stock
CB	2	OB	1
		4	1
Additional paid in capital
CB	25392	OB	23912
		4	1480
Dividend
6	11138
Dividend payable
		6	11138

3) Trial balance:
Acc titles	Debit $	Credit $
Cash	20921
Short term invest	10036
Acc receivables	17559
Inventories	2122
Other current assets	24007
Longterm investments	135320
PPE	31743
Other non-current assets	12592
Acc payable		30363
Accrued expenses		18555
Unearned revenue		8539
Short term notes payable		7765
Dividend payable		11138
Long term debt		47427
Other non current Liabilities		28010
Common stock		2
Additional paid In capital		25392
Retained earnings		88247
Dividend	11138
Total	265438	265438

4) Classified Balance Sheet:
Assets	Amount $
Cash	20921
Short term invest	10036
Acc receivables	17559
Inventories	2122
Other current assets	24007
Current Assets	74645
Longterm investments	135320
PPE	31743
Other non-current assets	12592
Total Assets	254300
Liabilities & Stockholders' Equity	Amount $
Acc payable	30363
Accrued expenses	18555
Unearned revenue	8539
Short term notes payable	7765
Dividend payable	11138
Current Liabilities	76360
Long term debt	47427
Other non current Liabilities	28010
Stockholders' Equity:
Common stock	2
Additional paid In capital	25392
Retained earnings	88247
Dividend	-11138
Total Liabi. & Stockholders' Equity	254300