Project #80231 - Balance Sheet

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.      
                 
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.)        
                 
Cash   Investments (short-term)
Beg. Bal. 22,000       Beg. Bal. 3,000    
    10,000 (a)   (a) 10,000    
                 
                 
    3,000 (g)   End. Bal.      
           
         
End. Bal.        
         
Accounts Receivable   Inventory
Beg. Bal. 3,000       Beg. Bal. 20,000    
                 
                 
End. Bal.         End. Bal.      
                 
Notes Receivable (long-term)   Equipment
Beg. Bal. 1,000       Beg. Bal. 50,000    
                 
                 
                 
End. Bal.         End. Bal.      
                 
Factory Building   Intangibles
Beg. Bal. 90,000       Beg. Bal. 5,000    
          (g) 3,000    
                 
                 
End. Bal.         End. Bal.      
                 
Accounts Payable   Accrued Liabilities Payable
Beg. Bal.   15,000     Beg. Bal.   4,000  
                 
                 
End. Bal.         End. Bal.      
                 
Notes Payable (short-term)   Long-Term Notes Payable
Beg. Bal.   7,000     Beg. Bal.   47,000  
                 
                 
                 
End. Bal.         End. Bal.      
                 
Common Stock   Additional Paid-in Capital
Beg. Bal.   10,000     Beg. Bal.   80,000  
                 
                 
                 
End. Bal.         End. Bal.      
         
Retained Earnings
Beg. Bal.   31,000  
       
       
End. Bal.      
                 
Required:                
4 Prepare a trial balance at December 31, 2015.          
                 
  COUGAR PLASTICS COMPANY          
  Trial Balance          
  At December 31, 2015          
  Account Titles Debit Credit          
  Cash              
  Investments (short-term)              
  Accounts receivable              
  Inventory              
  Notes receivable (long-term)              
  Equipment              
  Factory building              
  Intangibles              
  Accounts payable              
  Accrued liabilities payable              
  Notes payable (short-term)              
  Notes payable (long-term)              
  Common stock              
  Additional paid-in capital              
  Retained earnings              
  Totals $243,000 $0          
                 
Required:                
5 Prepare a classified balance sheet at December 31, 2015.          
                 
  COUGAR PLASTICS COMPANY        
  Balance Sheet        
  At December 31, 2015        
  Assets Liabilities        
  Current assets:   Current liabilities:          
                 
                 
                 
                 
                 
      Total current liabilities                                   -          
  Total current assets                                  -              
  Non-current assets:              
      Total liabilities 0        
      Stockholders' Equity        
                 
                 
                 
                 
  Total non-current assets                                  -   Total stockholders' equity                                   -          
  Total assets  $                              -   Total liabilities and stockholders' equity  $                              -          
                 
Required:                
6  Compute the current ratio for 2015. (Round your answer to 2 decimal places.)        
                 
  Current ratio              
                 

Subject Business
Due By (Pacific Time) 08/27/2015 11:00 pm
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