Ch.2 Q5 - Correct answers PDF

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10/24/2020

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[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). 

Cash Short-term investments Accounts receivable Inventories Other current assets Total current assets Long-term investments Property, plant, and equipment, net Other noncurrent assets Total assets

Accounts payable Accrued expenses Unearned revenue Short-term notes payable Total current liabilities Long-term debt Other noncurrent liabilities Total liabilities Common stock ($0.00001 per value) Additional paid-in capital Retained earnings Total stockholders’ equity Total liabilities and shareholders' equity

     $ 14,084  11,425  17,755  2,142  24,231  69,637  132,264  20,957  12,728 $ 235,586      $ 30,687  18,755  8,635  6,411  64,488  29,464  28,310  122,262    1  25,712  87,611  113,324 $235,586

 Assume that the following transactions (in millions) occurred during the next fiscal year (ending on September 29, 2018):  a. Borrowed $18,309 from banks due in two years. b. Purchased additional investments for $25,000 cash; one-fifth were long term and the rest were short term. c. Purchased property, plant, and equipment; paid $9,615 in cash and signed a short-term note for $1,454. d. Issued additional shares of common stock for $1,513 in cash; total par value was $1 and the rest was in excess of par value. e. Sold short-term investments costing $19,050 for $19,050 cash. https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=5.&postSubmissionView=13252714092682382,13252714093946409&wid=132…

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10/24/2020

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Total liabilities



153,194

Stockholders’ equity:



Common stock



2



Additional paid-in capital



27,224



Retained earnings



76,442



Total stockholders’ equity



103,668

Total liabilities and stockholders’ equity



$ 256,862

*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

rev: 09_25_2019_QC_CS-180972  References Financial Statements

Difficulty: 3 Hard

Learning Objective: 02-04 Determine the impact of business transactions on the balance sheet using two basic tools: Journal entries and T-accounts.

P2-5 Part 4

Learning Objective: 02-02 Identify what constitutes a business transaction and recognize common balance sheet account titles used in business.

Learning Objective: 02-05 Prepare a trial balance and simple classified balance sheet and analyze the company using the current ratio.



4. Prepare a classified balance sheet for Mango at September 29, 2018, based on these transactions. (Enter your answers in millions.) MANGO, INC. Balance Sheet At September 29, 2018 (in millions) Assets Current assets: Cash

$

18,341

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Short-term investments

12,375

Accounts receivable

17,755

Inventories

2,142

Other current assets

Total current assets

24,231

74,844

F

Long-term investments

137,264

Property, plant and equipment

32,026

Other noncurrent assets

12,728

Total assets

F

$

256,862

$

30,687

Liabilities and stockholders’ equity Current liabilities: Accounts payable Accrued expenses

18,755

Unearned revenue

8,635

Dividends payable

11,169

Short-term notes payable

Total current liabilities

7,865

77,111

F

Long-term debt

47,773

Other noncurrent liabilities

28,310

Total liabilities

153,194

F

Stockholders’ equity: Common stock

2

Additional paid-in capital

27,224

Retained earnings

76,442

Total stockholders’ equity

F

Total liabilities and stockholders’ equity

F

103,668 $

256,862

rev: 09_25_2019_QC_CS-180972  Explanation:

https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=5.&postSubmissionView=13252714092682382,13252714093946409&wid=132…

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