CF Unit1 P2-3 Cougar Plastics Company
CF
Unit1 P2-3 Cougar Plastics Company has been operating for three years. At
December 31, 2014, the accounting
P2-3 Recording Transactions in T-Accounts, Preparing the Balance Sheet
from a Trial Balance, and Evaluating the Current Ratio LO2-2, 2-4, 2-5
Cougar Plastics Company has been operating for three years. At December
31, 2014, the accounting records reflected the following:
Cash $ 22,000 Accounts payable $15,000
Investments (short-term)
3,000 Accrued liabilities
payable 4,000
Accounts receivable 3,000 Notes payable (short-term) 7,000
Inventory 20,000 Long-term notes payable 47,000
Notes receivable (long-term)
1,000 Common stock 10,000
Equipment 50,000 Additional paid-in capital 80,000
Factory building 90,000 Retained earnings 31,000
Intangibles 5,000
During
the year 2015, 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.
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.
Required:
1.
& 2. Record each necessary entry for the events in 2015 in T-accounts
(including referencing) and determine the ending balances. The balances at the
end of 2014 have been entered as beginning balances
for 2015. (Transaction (a) has been completed in the T-accounts as an example.)
Required:
4
Prepare a trial balance at December 31, 2015.
Required:
5
Prepare a classified balance sheet at December 31, 2015.
Required:
6
Compute the current ratio for 2015. (Round your answer to 2 decimal places.)
TUTORIAL PREVIEW
Cash
|
|||
Beg. Bal.
|
22,000
|
||
(e)
|
11,000
|
10,000
|
(a)
|
(f)
|
9,000
|
5,000
|
(b)
|
(i)
|
1,000
|
5,000
|
©
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File name: CF Unit1 P2-3 Cougar Plastics.xls File type: .xls PRICE: $15
