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Recording Transactions in a Journal and T-Accounts

1. Prepare journal entries to record transactions a-e.
2. Create T-accounts for each of the accounts on the balance sheet and enter the balances at the end of September as beginning balances for the October 1-December 31 quarter.
3. Enter the effects of the transactions in T-accounts (including referencing) and determine the December 31 balances.
4. Explain your response to event e.
5. Prepare a classified balance sheet at December 31.
6. As of December 31, has the financing for the investment in assets made by Starbucks primarily come from liabilities or stockholders' equity?


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Please see the attached file.

Starbucks is a coffee company?a big coffee company. During a 10-year period, the number of
Starbucks locations grew from 165 to over 5,800 stores?an average increase of 43 percent every
year. The following is adapted from a recent Starbucks annual report. Starbucks' year-end is
September 30 and dollars are reported in thousands.

Cash $ 174,500 Accounts payable $462,600
Accounts receivable 97,500 Short-term bank loans 74,900
Inventories 263,200 Long-term debt 5,100
Other current assets 312,100 Other long-term liabilities 23,500
Property, plant, and equipment 1,265,800 Contributed capital 930,300
Other long-term assets 179,500 Retained earnings 796,200

Assume that the following events occurred in the following quarter, which ended December 31:

a. Paid $10,400 cash for additional other long-term assets.
b. Issued additional shares of stock for $5,300 in cash.
c. Purchased property, plant, and equipment; paid $11,800 in cash and signed additional longterm
loans for $8,900.
d. Sold, at cost, other long-term assets for $3,000 cash.
e. Conducted negotiations to purchase a coffee farm, which is ...

Solution Summary

The solution explains how to journalize the transactions, post to T-accounts and prepare a balance sheet.