Question

[The following information applies to the questions displayed below. Cougar Plastics Company has been operating for three years. At December 31 of last year the accounting records reflected the following $22,000 Accounts payable Cash Investments (short-term) Accounts recelvable Inventory Notes receivable (long-term Equipment Factory building Intangibles $15,000 3,000 Accrued liabilities payable 4,000 3,000 Notes payable (short-term7000 20,000 Notes payable (long-term 47,000 10,000 80,000 31,000 1,000 Common stock 50,000 Additional paid-in capital 90,000 Retained earnings 5,000 During the current year, the company had the following summarized activities: a. Purchased short-term investments for $10,000 cash. b. Lent $5,000 to a supplier who signed a two-year note c. Purchased equipment that cost $18,000; paid $5,000 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 $85,000 per year plus options to purchase company stock at a set price based on company performance. e. Issued an additional 2,000 shares of $0.50 par value common stock for $11,000 cash. f. Borrowed $9,000 cash from a local bank, payable in three months. g. Purchased a patent (an intangible asset) for $3,000 cash. h Built an addition to the factory for $24,000; paid $8,000 in cash and signed a three-year note for the balance. i. Returned defective equipment to the manufacturer, receiving a cash refund of $1,000.

Answer 1

Answer:

T accounts
Cash					Investments
Beg. Bal	22,000				Beg. Bal	3,000
( e )	11,000	10,000	(a)		(a)	10,000
(f)	9,000	5,000	(b)
(i)	1,000	5,000	(c)		End bal.	13,000
		3,000	(g)
		8,000	(h)
End bal.	12,000
Accounts Receivable					Inventory
Beg. Bal	3,000				Beg. Bal	20,000
End bal.	3,000				End bal.	20,000
Notes receivable(Long Term)					Equipment
Beg. Bal	1,000				Beg. Bal	50,000
(b)	5,000				(c)	18,000
							1,000	(i)
End bal.	6,000				End bal.	67,000
Factory building					Intangibles
Beg. Bal	90,000				Beg. Bal	5,000
(h)	24,000				(g)	3,000
End bal.	1,14,000				End bal.	8,000
Accounts payable					Accured Liabilities payable
Beg. Bal		15,000			Beg. Bal		4,000
End bal.		15,000			End bal.		4,000
Notes payable(Short Term)					Long term notes payable
Beg. Bal		7,000			Beg. Bal		47,000
		13,000	(c)				16,000	(h)
		9,000	(f)
End bal.		29,000			End bal.		63,000
Common stock					Additional Paid in capital
Beg. Bal		10,000			Beg. Bal		80,000
		1,000	( e )				10,000	( e )
End bal.		11,000			End bal.		90,000
Retained Earnings
Beg. Bal		31,000
End bal.		31,000