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ACCT 2100 Chapter 2 Take Home Quiz
Chapter 2 Take Home Quiz
The following information is provided for Hennepin Productions, Inc. at December 31, 2015:
Hennepin Productions Monthly Account Balances
(in thousands of dollars)
Balance
Cash
$ 20,000
Short-Term Investments
3,150
Accounts Receivable
5,500
Other Assets
1,800
Plant and Equipment
1,200
Land
5,000
Long-Term Investments
500
Other Noncurrent Assets
800
Accounts Payable
5,750

Accrued Expenses Payable

1,600
Interest Payable
Short-Term Notes Payable
3,100
5,000
Long-Term Notes Payable
6,000
Dividends Payable
1,500
Common Stock
4,600
Retained Earnings
10,400
Hennepin Productions entered into the following transactions (in thousands of dollars) during
January 2016:
1. Issued 400 shares of common stock for $9 each.
2. Paid $5,200 on a short-term note payable including $1,500 of accrued interest from last period.
3. Purchased supplies worth $2,250 on account.
4. Geoffrey Hennepin, CEO signed a $15,000 note payable for construction of his beach house. The
note is due on January 31, 2017.
5. Paid a cash dividend of $1,500.
6. Purchased 100 shares of stock in Barbara Productions for $25 each. Hennepin intends to hold the
investment for 5 years.
7. Purchased equipment totaling $20,000 by signing a $12,500 note due January 31, 2018. The
remaining balance was paid in cash.
8. Sold $500 of long term investments in exchange for $500.
9. Collected $750 on outstanding accounts receivable.
10. Paid accounts payable of $5,750.

Required:
a. Prepare the journal entry for each transaction.
b. Create T-accounts with beginning balances. Post each journal entry to the appropriate T-account.
Create new accounts as necessary.
c. Prepare comparative balance sheets at December 31, 2015 and January 31, 2016 in good form.
d. Calculate the current ratio at December 31, 2015 and January 31, 2016. Assuming that Hennepin
has a target ratio of 1.0, has the ratio improved or deteriorated? Explain why?