Answer:
a. Purchased short-term investments for $8,600 cash.
Dr short term investments 8,600
Cr cash 8,600
b. Lent $6,300 to a supplier who signed a two-year note.
Dr notes receivable 6,300
Cr cash 6,300
c. Purchased equipment that cost $24,000; paid $4,900 cash and signed a one-year note for the balance.
Dr equipment 24,000
Cr cash 4,900
Cr notes payable 19,100
d. Hired a new president at the end of the year.
no entry
e. The contract was for $86,000 per year plus options to purchase company stock at a set price based on company performance.
no entry
f. Issued an additional 2,300 shares of $0.50 par value common stock for $19,000 cash.
Dr cash 19,000
Cr common stock 115
Cr additional paid in capital 18,885
g. Borrowed $19,000 cash from a local bank, payable in three months.
Dr cash 19,000
Cr notes payable 19,000
h. Purchased a patent (an intangible asset) for $1,100 cash.
Dr patent 1,100
Cr cash 1,100
i. Built an addition to the factory for $29,000; paid $8,700 in cash and signed a three-year note for the balance.
Dr building 29,000
Cr cash 8,700
Cr notes payable 20,300
j. Returned defective equipment to the manufacturer, receiving a cash refund of $2,400.
Dr cash 2,400
Cr equipment 2,400
<h2>Cougar Plastics Company</h2><h2>Balance Sheet</h2><h2>For the year ended December 31, 202x</h2><h2>Assets</h2>
<u>Current assets:</u>
Cash $33,800
Accounts receivable $4,600
Inventory $27,000
Investments (short-term) $10,700
Total current assets $76,100
<u>Long term investments:</u>
Notes receivable $9,000
Total long term investments $9,000
<u>Property, plant and equipment:</u>
Equipment $78,600
Factory building $120,000
Total P, P & E $198,600
<u>Intangible assets:</u>
Intangibles $4,500
Patent $1,100
Total intangible assets <u> $5,600</u>
Total assets $289,300
<h2>Liabilities and stockholders' equity</h2>
<u>Current liabilities:</u>
Accounts payable $19,000
Accrued liabilities payable $3,100
Notes payable (short-term) $43,300
Total current liabilities $65,400
<u>Long term liabilities:</u>
Notes payable $61,300
Total long term liabilities $61,300
<u>Stockholders' equity:</u>
Common stock $10,815
Additional paid-in capital $115,185
Retained earnings $36,600
Total stockholders' equity <u>$162,600</u>
Total liabilities + stockholder's equity $289,300
