chapter 2 question 425344

P2 3 Recording Transactions in T Accounts, Preparing the Balance Sheet, and Evaluating the Current Ratio LO2, 4, 5

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Cougar Plastics Company has been operating for three years. At December 31, 2011, the accounting records reflected the following:


Cash	$	21,000	Intangibles	$	4,500
Investments (short term)		3,200	Accounts payable		13,000
Accounts receivable		4,400	Accrued liabilities payable		2,100
Inventory		32,000	Notes payable (short term)		7,700
Notes receivable (long term)		1,900	Long term notes payable		48,000
Equipment		42,000	Contributed capital		102,000
Factory building		106,000	Retained earnings		42,200

During the year 2012, the company had the following summarized activities:

a.	Purchased short term investments for $8,100 cash.
b.	Lent $6,100 to a supplier who signed a two year note .
c.	Purchased equipment that cost $25,000; paid $5,100 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 $82,000 per year plus options to purchase company stock at a set price based on company performance.
e.	Issued an additional 2,900 shares of capital stock for $16,000 cash.
f.	Borrowed $18,000 cash from a local bank, payable in three months.
g.	Purchased a patent (an intangible asset) for $1,700 cash.
h.	Built an addition to the factory for $21,000; paid $7,400 in cash and signed a three year note for the balance.
i.	Returned defective equipment to the manufacturer, receiving a cash refund of $3,500.