Starbucks is a coffee company-a big coffee company. Duringa 10-year period, the number of Starbucks locations grew from 165to over 5,800 stores-an average increase of 43 percent everyyear. 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 capital930,300
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-termassets.
b. Issued additional shares of stock for $5,300 incash.
c. Purchased property, plant, and equipment; paid$11,800 in cash and signed additional long term loans for$8,900.
d. Sold, at cost, other long-term assets for $3,000cash.
e. Conducted negotiations to purchase a coffee farm,which is expected to cost $7,400.
Required:
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 31quarter.
3. Enter the effects of the transactions in T-accounts (including referencing) and determine the December 31balances.
4. Explain your response to event e.
5. Prepare a classified balance sheet atDecember 31.
6. As of December 31, has the financing for theinvestment in assets made by Starbucks primarily come fromliabilities or stockholders' equity?