Question

P2-3 Recording Transactions in T-Accounts, Preparing a Statement of Financial Position from a Trial Balance, and Evaluating the Current Ratio LO2-4, 2-6 Injection Plastics Company has been operating for three years. At December 31, 2020, the accounting records reflected the following: Cash Investments (short-term) Accounts receivable Inventories Notes receivable (long-term) Equipment Factory building $23,500 2,500 3,500 26,500 1,500 50,500 92,500 Intangibles Accounts payable Accrued liabilities Short-term borrowings Notes payable (long-term) Contributed capital Retained earnings $ 3,500 15,500 2,500 7,500 50,500 95,000 33,000 During the year 2021, the following summarized transactions were completed: a. Purchased equipment that cost $19.000; paid $6,500 cash and signed a one-year note for the balance. b. Issued 2.500 additional shares for $15,000 cash. c. Lent $7,500 to a manager, who signed a two-year note. d. Purchased short-term investments for $9,500 in cash. e. Paid $5,500 on the note in transaction (a). Borrowed $12,500 cash on December 31, 2021, from the bank and signed a note, payable June 30, 2022. g. Purchased a patent (an intangible asset) for $3,500 cash. h. Built an addition to the factory for $26,500; paid $9,500 in cash and signed a three-year note for the balance. .Hired a new president at the end of the year. The contract was for $87,500 per year plus options to purchase company shares at a set price based on company performance. j. Returned defective equipment to the manufacturer, receiving a cash refund of $1,500. Required: 1& 2. Post the T-accounts for each of the accounts on the statement of financial position and enter the balances at the end of 2020 as beginning balances for 2021.

Answer 1

Please hit LIKE button if this helped. Part 1 and 2 Investment (short term) Debit Credit Beginning $ 2,500 d $ 9,500 Cash Debit Beginning $ 23,500 a b $ 15,000 C f $ 12,500 d j $ 1,500 e 8 h Credit $ $ $ $ $ $ 6,500 7,500 9,500 5,500 3,500 9,500 Ending $ 10,500 Ending $ 12,000 Accounts Receivable Debit Credit Beginning $ 3,500 Inventories Debit Beginning $ 26,500 Credit Ending $ 3,500 Ending $ 26,500 Note Receivable (Long Term) Debit Credit Beginning $ 1,500 с $ 7,500 Equipment Debit Beginning $ 50,500 a $ 19,000 Credit $ 1,500 Ending $ 9,000 Ending $ 68,000 Credit Credit Factory Building Debit Beginning $ 92,500 h $ 26,500 Intangibles Debit Beginning $ 3,500 8 $ 3,500 Ending $ 119,000 Ending $ 7,000

Debit Accounts Payable Credit Beginning $ 15,500 Accrued Liabilties Debit Credit Beginning $ 2,500 Ending $ 15,500 Ending $ 2,500 Short Term Borrowing Debit Credit $ 5,500 Beginning $ 7,500 a $ 12,500 f $ 12,500 Note Payable Long Term Debit Credit Beginning $ 50,500 h $ 17,000 Ending $ 27,000 Ending $ 67,500 Contributed Capital Debit Credit Beginning $ 95,000 b $ 15,000 Retained Earning Debit Credit Beginning $ 33,000 Ending $ 110,000 Ending $ 33,000

Part 4 Cash Investment (short term) Accounts Receivable Inventories Note Receivable (Long Term) Equipment Factory Building Intangibles Accounts Payable Accrued Liabilties Short Term Borrowing Note Payable Long Term Contributed Capital Retained Earning Total Debit Credit $ 10,500 $ 12,000 $ 3,500 $ 26,500 S 9,000 S 68,000 $ 119,000 S 7,000 S 15,500 $ 2,500 $ 27,000 $ 67,500 $ 110,000 $ 33,000 $ 255,500 $ 255,500 Part 5 Assets Current Assets: Cash Investment (short term) Accounts Receivable Inventories Total Current Assets Non Current Assets: Note Receivable (Long Term) Equipment Factory Building Intangibles $ 10,500 $ 12,000 $ 3,500 $ 26,500 $ 52,500 Liabilities Current Liabilities: Accounts Payable $ 15,500 Accrued Liabilties S 2,500 Short Term Borrowing $ 27,000 Total Current Liabilities $ 45,000 Note Payable Long Term $ 67,500 Total Liabitlieis $ 112,500 $ 9,000 S 68,000 $ 119,000 $ 7,000 Stockholder's Equity: Contributed Capital Retained Earning Total Stockholder's Equity $ 110,000 $ 33,000 $ 143,000 Total Assets $ 255,500 $ 255,500 Part 6 Current Assets Current Liabilities Current Ratio a b a/b $ 52,500 $ 112,500 0.47