Cougar Plastics Company has been operating for three years A

Cougar 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 $20,000 Accounts payable $18,000 2,700 6,300 48,000 10,300 92,700 32,800 2,600 3,300 Accrued liabilities payable Notes payable (short-term) Notes payable (long-term) 29,000 2,600 Common stock 59,000 Additional paid-in capital 90,000 Retained earnings 4,300 During the current year, the company had the following summarized activities: a. Purchased short-term investments for $8,600 cash. b. Lent $6,700 to a supplier who signed a two-year note c. Purchased equipment that cost $25,000; paid $5,200 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 $78,000 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 $19,000 cash. f Borrowed $12,000 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 $21,000; paid $8,200 in cash and signed a three-year note for the balance i. Returned defective equipment to the manufacturer, receiving a cash refund of $1,200.

Solution

Cash Investments (short term) Note Receivable (long term) Factory Building Beg.Bal. $20,000 Beg.Bal. $2,600 Beg.Bal. $2,600 Beg.Bal. $90,000 $8,600 a $8,600 a $6,700 b $21,000 h $6,700 b $5,200 c $19,000 e $12,000 f $3,000 g $8,200 h $1,200 i End.Bal. $20,500 End.Bal. $11,200 End.Bal. $9,300 End.Bal. $111,000 Accounts Receivables Inventory Equipment Intangibles Beg.Bal. $3,300 Beg.Bal. $29,000 Beg.Bal. $59,000 Beg.Bal. $4,300 $25,000 c $3,000 g $1,200 i End.Bal. $3,300 End.Bal. $29,000 End.Bal. $82,800 End.Bal. $7,300 Accounts Payable Accrued Liabilities Payable Notes Payable (short term) Long term notes payable Beg.Bal. $18,000 Beg.Bal. $2,700 Beg.Bal. $6,300 Beg.Bal. $48,000 $19,800 c $12,800 h End.Bal. $18,000 End.Bal. $2,700 End.Bal. $26,100 End.Bal. $60,800 Common Stock Additional Paid In capital Retained Earnings Bank Loan (Short term) Beg.Bal. $10,300 Beg.Bal. $92,700 Beg.Bal. $32,800 Beg.Bal. $0 $1,000 e $18,000 e $12,000 f End.Bal. $11,300 End.Bal. $110,700 End.Bal. $32,800 End.Bal. $12,000