Question

Jaguar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash Investments (short-term) Accounts receivable Inventory Notes receivable (long-term) Equipment Factory building Intangibles $19,000 Accounts payable 3,800 Accrued liabilities payable 3,600 Notes payable (current) 24,000 Notes payable (noncurrent) 1,300 Common stock 45,000 Additional paid-in capital 97,000 Retained earnings 3,900 $21,000 3,200 6,700 47,000 9,100 81,900 28,700 During the current year, the company had the following summarized activities: a. Purchased short-term investments for $8,600 cash. b. Lent $5,200 to a supplier who signed a two-year note. c. Purchased equipment that cost $22,000; paid $4,200 cash and signed a one-year note for the balance. d. Hired a new president at the end of the year. The contract was for $80,000 per year plus options to purchase company stock a set price based on company performance. The new president begins her position on January 1 of next year. e. Issued an additional 2,100 shares of $0.50 par value common stock for $17,000 cash. f. Borrowed $15,000 cash from a local bank, payable in three months. g. Purchased a patent (an intangible asset) for $2,500 cash. h. Built an addition to the factory for $28,000; paid $8,300 in cash and signed a three-year note for the balance. i. Returned defective equipment to the manufacturer, receiving a cash refund of $2,900.

Answer 1

Sl No.	Date	General journal					Debit	Credit
a.	Dec 31.	Investments (short-term)					8600
		Cash						8600
		(Purchased investments for cash)
b.	Dec 31.	Note receivable (long-term)					5200
		Cash						5200
		(Lent to a supplier)
c.	Dec 31.	Equipment					22000
		Cash						4200
		Note payable (Current)			(22000-4200)			17800
		(Equipment purchased)
d.	Dec 31.	No entry
e.	Dec 31.	Cash					17000
		Common stock			(2100*0.50)			1050
		Additional paid-in capital			(17000-1050)			15950
		(Common stock issued)
f.	Dec 31.	Cash					15000
		Note payable (Current)						15000
		(Borrowed cash from a local bank)
g.	Dec 31.	Intangibles					2500
		Cash						2500
		(Purchased a patent)
h.	Dec 31.	Factory building					28000
		Cash						8300
		Note payable (Noncurrent)			(28000-8300)			19700
		(Built an addition to the factory)
i.	Dec 31.	Cash					2900
		Equipment						2900
		(Cash refund for equipment returned)
				Balance sheet
	Assets				$		Liabilities				$
Current assets:						Current liabilities:
Cash			(Note:1)		25100	Accounts payable					21000
Investments (short-term)			(8600+3800)		12400	Accrued liabilities payable					3200
Accounts receivable					3600	Note payable (Current)		(17800+15000+6700)			39500
Inventory					24000
Total current assets					65100	Total current liabilities					63700
Non-current assets:						Non-current liabilities:
Note receivable (long-term)			(1300+5200)		6500	Note payable (Noncurrent)			(19700+47000)		66700
Equipment			(45000+22000-2900)		64100
Factory building			(97000+28000)		125000	Total liabilities					130400
Intangibles			(3900+2500)		6400
Total non-current assets					202000		Stockholder's equity
						Common stock			(9100+1050)		10150
						Additional paid-in capital			(81900+15950)		97850
						Retained earnings					28700
						Total stockholder's equity					136700
Total assets					267100	Total liabilities and stockholder's equity					267100