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: $20,000 3,400 7,600 42,000 9,800 88,200 49,500 Cash Investments (short-term) Accounts receivable S 21,000 Accounts payable 3,500 3,500 28,000 1,700 51,000 Accrued liabilities payable Notes payable (short-term) Notes payable (long-term) Common stock Additional paid-in capital Notes recelvable (long-term) Equipment Factory building Intangibles 107000 Retained earnings 4,800 During the current year, the company had the following summarized activities: a. Purchased short-term investments for $8,500 cash. b. Lent $6,300 to a supplier who signed a two-year note. c. Purchased equipment that cost $19,000; paid $5,700 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 $94,000 per year plus options to purchase company stock at a set price based on company performance e. Issued an additional 2,600 shares of $0.50 par value common stock for $15,000 cash. f. Borrowed $14,000 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 $26,000; paid $7,900 in cash and signed a three-year note for the balance. i. Returned defective equipment to the manufacturer, receiving a cash refund of $1,400.

Answer 1