Higgins Company has been operating for one year (2014). You are a member of the management team investigating expansion ideas that will require borrowing funds from banks. At the start of 2015, Higgins’s T-account balances were as follows: Assets: Cash Short-Term Investments Property and Equipment 4,400 2,600 3,200 Liabilities: Short-Term Notes Payable Long-Term Notes Payable 1,500 390 Stockholders’ Equity: Common Stock Additional Paid-in Capital Retained Earnings 660 2,640 5,010 The following transactions occured in 2015: (a) Borrowed $3,100 from a local bank, signing a note due in three years. (b) Sold $1,400 of the investments for $1,400 cash. (c) Sold one-half of the property and equipment for $1,600 in cash. (d) Declared and paid $360 in cash dividends to stockholders. Required: 1. Using the data from these T-accounts, determine the amounts for the following on January 1, 2015:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Higgins Company has been operating for one year (2014). You are a member of the management team investigating expansion ideas that will require borrowing funds from banks. At the start of 2015, Higgins’s T-account balances were as follows:

Assets:

Cash

Short-Term Investments

Property and Equipment

4,400

2,600

3,200

Liabilities:

Short-Term Notes Payable

Long-Term Notes Payable

1,500

390

Stockholders’ Equity:

Common Stock

Additional Paid-in Capital

Retained Earnings

660

2,640

5,010

The following transactions occured in 2015:

(a)	Borrowed $3,100 from a local bank, signing a note due in three years.
(b)	Sold $1,400 of the investments for $1,400 cash.
(c)	Sold one-half of the property and equipment for $1,600 in cash.
(d)	Declared and paid $360 in cash dividends to stockholders.

Required:

1.	Using the data from these T-accounts, determine the amounts for the following on January 1, 2015:

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