Question

Alexandray's Interiors, Inc., is a leading international manufacturer and retailer of home furnishings. The following is adapted from Alexander's balance sheet as of September 30, 2017 Dollars are in millions) Cash Accounts Receivable Inventories Other Current Assets Property. Plant, and Equipment Other Assets $164.00 Accounts Payable 24.09 Wages and Other Expenses Payable Long-Term Det 38.00 Other Long-Term Liabilities 401.00 Contributed Capital 123.00 Retained tarings $38.00 147.00 239.00 56.00 Assume that the following events occurred in the quarter ended December 31 famounts provided are in whole dolas a Paid 58.000.000 cash for an additional "other asset" b. issued additional shares for $8.000.000 in cash c. Purchased property, plant, and equipment paid $8,000,000 in cash and signed a note to pay the remaining $21,000,000 in two years d. Sold, at cost, other assets for $1.600.000 cash e Conducted negotiations to purchase a sawmil, which is expected to cost $48,000,000 Required: 1. Analyze transactions through (a to determine their effects on the accounting equation (Enter any decreases to account balances with a minus sign. Enter your answers in millions, rounded to two decimal places) d . < Prey 45 Se e

Answer 1

1. Accounting Equation - (Amount in $' Millions)

Liabilities + Shareholder's Equity Common Stock $ 8.00 Transaction Assets a Other Assets $ 8.00 Cash $ (8.00) b Cash Received $ 8.00 с Property Plant and Equipment $ 29.00 Paid Cash $ (8.00) d Other Assets $ (1.60) Cash $ 1.60 e No Entry Notes Payable $ 21.00

2. Ledgers -

Accounts Receivable Beg Bal$ 24 Beg Bal a $ $ $ Cash 104 $ 8 $ 2 0000 b с d End Bal $ 98 End Bal$ 24 Inventories Beg Bal $ 224 Property Plant and Equipment Beg Bals 403 b $ 29 End Bal $ 224 End Bal $ 432 Other Assets 123 d Accounts Payable $ 38 $ 1.60 Beg Bal Beg Bal a $ $ 8 End Bal $ 129 End Bal $ 38 Wages and Other Expenses Payable Beg Bal $ 147 Beg Bal Long Term Debt $ 239 $ 21 b End Bal $ 147 End Bal $ 260 Other Long Term Liabilities Beg Bal $ 56 Beg Bal Contributed Capital $ 404 $ 8 End Bal $ 56 End Bal $ 412 Retained Earnings $ 32 Other Current Assets Beg Bal$ 38 Beg Bal End Bal $ 32 End Bal$ 38

3. Balance Sheet -

ALEZANDRAY'S INTERIOR, INC. Balance Sheet At December 31, 2017 (In Million of Dollars) Assets Current Assets: Cash Accounts Receivable Inventories Other Current Assets Total Current Assets 98 24 $ $ $ $ $ 224 38 384 432 Property Plant and Equipment Other Assets $ $ 129 $ 945 Total Assets Liabilities Current Liabilities: Accounts Payable Wages and Other Expenses Payable Total Current Liabilities 38 $ $ $ 147 185 260 Long Term Debt Other Long Term Liabilities $ $ 56 Total Liabilities $ 501 412 Shareholder's Equity Contributed Capital Retained Earnings Total Shareholder's Equity $ $ $ 32 444 Total Liabilities and Shareholder's Equity $ 945

4. Assets are primarily comes from Liabilities.