Alex’s Interiors, Inc., is an international manufacturer and retailer of home furnishings. The following is from Alex’s balance sheet as of September 30, 2020 (dollars are in millions).
 

              Cash $ 120.00    Accounts Payable $ 46.00      Accounts Receivable   32.00    Wages and Other Expenses Payable   171.00      Inventories   248.00    Notes Payable, (long-term)   263.00      Other Current Assets   46.00    Other Long-Term Liabilities   64.00      Property, Plant, and Equipment   435.00    Contributed Capital   436.00      Other Assets   139.00    Retained Earnings   40.00   

Assume that the following events occurred in the quarter ended December 31 (amounts provided are in whole dollars):
 

a. Paid $12,000,000 cash for an additional other asset.

b. Issued additional shares for $12,000,000 in cash.

c. Purchased property, plant, and equipment; paid $12,000,000 in cash and signed a note to pay the remaining $29,000,000 in two years.

d. Sold, at cost, other assets for $2,000,000 cash.

e. Conducted negotiations to purchase a sawmill, which is expected to cost $56,000,000.

1. Analyze transactions (a) through (e) to determine their effects on the accounting equation. 

2. Record the transaction effects determined in requirement 1 using journal entries. 

3. Summarize the journal entry effects from requirement 2 using T-accounts. Use the September 2020 ending balances as the beginning balances for the October to December 2020 quarter.

4. Prepare a classified balance sheet at December 31, 2020

5. As of December 31, 2020, has the financing for Alex’s Interiors’ investment in assets primarily come from liabilities or from shareholders’ equity?

The market value of Farmington Corp.'s common shares was quotedat $54 per share at December 31, 2018, and 2017. Planetarium 'sbalance sheet at December 31, 2018, and 2017, and statement ofincome and retained earnings for the years then ended are presentedbelow: Farmington Corp. Balance Sheet December 31 2018 2017 Assets:Current assets: Cash $ 9,000,000 $ 5,200,000 Short-term investments17,200,000 15,400,000 Accounts receivable (net) 109,000,000111,000,000 Inventories, lower of cost or market 122,000,000140,000,000 Prepaid expenses 4,000,000 2,800,000 Total currentassets $261,200,000 $274,400,000 Property, plant, and equipment(net) 350,000,000 315,000,000 Investments, at equity 2,800,0003,500,000 Long-term receivables 15,000,000 20,000,000 Copyrightsand patents (net) 6,000,000 7,000,000 Other assets 8,000,0009,100,000 Total assets $643,000,000 $629,000,000 Liabilities andStockholders' Equity: Current liabilities: Notes payable $7,000,000 $ 17,000,000 Accounts payable 55,000,000 52,000,000Accrued expenses 27,500,000 30,000,000 Income taxes payable1,500,000 2,000,000 Current portion of long-term debt 10,000,0009,500,000 Total current liabilities 101,000,000 110,500,000Long-term debt 180,000,000 190,000,000 Deferred income taxes69,000,000 65,000,000 Other liabilities 15,000,000 9,500,000 Totalliabilities 365,000,000 375,000,000 Stockholders' equity: Commonstock, par value $1; authorized 20,000,000 shares; issued andoutstanding 12,000,000 shares 12,000,000 12,000,000 10% cumulativepreferred shares, par value $100; $100 liquidating value;authorized 100,000 shares; issued and outstanding 60,000 shares6,000,000 6,000,000 Additional paid-in capital 119,000,000119,000,000 Retained earnings 141,000,000 117,000,000 Totalstockholders' equity 278,000,000 254,000,000 Total liabilities andstockholders' equity $643,000,000 $629,000,000 Farmington Corp.Statement of Income and Retained Earnings Year ended December 312018 2017 Net sales $540,000,000 $500,000,000 Cost and expenses:Cost of goods sold 390,900,000 400,000,000 Selling, general, andadministrative expenses 70,000,000 65,000,000 Other, net 9,100,0006,000,000 Total costs and expenses 470,000,000 471,000,000 Incomebefore income taxes 70,000,000 29,000,000 Income taxes 21,000,00011,600,000 Net income 49,000,000 17,400,000 Retained earnings atbeginning of period 117,000,000 113,100,000 Dividends on commonstock (24,400,000) (12,900,000) Dividends on preferred stock(600,000) (600,000) Retained earnings at end of period $141,000,000$117,000,000 Instructions Based on the above information, computethe following (for the year 2018 only): (Show supportingcomputations in good form.) (a) Current ratio. (b) Acid-test(quick) ratio. (c) Accounts receivable turnover. (d) Inventoryturnover. (e) Book value per share of common stock. (f) Earningsper share. (g) Price-earnings ratio. (h) Payout ratio on commonstock.