Cougar Plastics Company has been operating for three years.
At December 31 of last year, the accounting records reflected the following:
Cash $ 23,000 Accounts
payable $ 15,000
Investments (short-term)
3,300 Accrued
liabilities payable 2,400
Accounts receivable
3,900 Notes
payable (short-term) 7,600
Inventory 29,000 Notes payable
(long-term) 47,000
Notes receivable (long-term)
1,800 Common
stock 10,200
Equipment 43,000 Additional
paid-in capital 91,800
Factory building
96,000 Retained
earnings 29,200
Intangibles 3,200
During the current year, the company had the following
summarized activities:
Purchased short-term investments for $8,100 cash.
Lent $6,600 to a supplier who signed a two-year note.
Purchased equipment that cost $23,000; paid $5,500 cash and
signed a one-year note for the balance.
Hired a new president at the end of the year. The contract
was for $81,000 per year plus options to purchase company stock at a set price
based on company performance.
Issued an additional 2,700 shares of $0.50 par value common
stock for $18,000 cash.
Borrowed $15,000 cash from a local bank, payable in three
months.
Purchased a patent (an intangible asset) for $1,000 cash.
Built an addition to the factory for $20,000; paid $7,800 in
cash and signed a three-year note for the balance.
Returned defective equipment to the manufacturer, receiving
a cash refund of $1,800.
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