Question

Cash Investments (short-term) Accounts receivable Inventory Notes receivable (long-term) Equipment Factory building Intangibles $20,000 Accounts payable 3,200 Accrued liabilities payable 3,600 Notes payable (current) 26,000 Notes payable (noncurrent) 2,600 Common stock 50,000 Additional paid-in capital 97,000 Retained earnings 4,400 $21,000 2,600 7,300 41,000 9,500 85,500 39,900 During the current year, the company had the following summarized activities: a. Purchased short-term investments for $8,400 cash. b. Lent $5,700 to a supplier who signed a two-year note. c. Purchased equipment that cost $24,000; paid $4,800 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. The new president begins her position on January 1 of next year. e. Issued an additional 2,000 shares of $0.50 par value common stock for $16,000 cash. f. Borrowed $11,000 cash from a local bank, payable in three months. g. Purchased a patent (an intangible asset) for $2,400 cash. h. Built an addition to the factory for $28,000; paid $9,000 in cash and signed a three-year note for the balance. i. Returned defective equipment to the manufacturer, receiving a cash refund of $3,100.

Answer 1

$ Inventory A/C $ 26,000.00 $ Beg. Bal. Clo. Bal. 26,000.00 26,000.00 26,000.00 Cash A/C $ Beg. Bal. 20,000.00 Short term investment Notes Receivable (long term) Equipment A/C Common Stock A/C 16,000.00 Notes payable (current) A/C 11,000.00 Intangibles A/C Factory Building A/C Equipment A/C 3,100.00 Clo. Bal. 50,100.00 8,400.00 (a) 5,700.00 (b) 4,800.00 (c) (e) (f) 2,400.00 (g) 9,000.00(h) (0) 19,800.00 50,100.00 Notes payable (non current) A/C $ Beg. Bal. 41,000.00 Factory Building A/C 19,000.00 (h) Clo. Bal. 60,000.00 60,000.00 60,000.00 Accounts Receivable A/C $ 3,600.00 Beg. Bal. Clo. Bal. Beg. Bal. Equipment A/C Cash A/C Clo. Bal. Notes payable (current) A/C $ $ 7,300.00 19,200.00 (C) 11,000.00 (f) 37,500.00 37,500.00 37,500.00 3,600.00 3,600.00 3,600.00 Accounts Payable A/C $ Beg. Bal. Cash Clo. Bal. Notes Receivable (long term) A/C $ $ 2,600.00 5,700.00 8,300.00 8,300.00 8,300.00 $ 21,000.00 (b) Beg. Bal. Clo. Bal. 21,000.00 21,000.00 21,000.00

$ Factory Building A/C $ Beg. Bal. 97,000.00 Cash A/C 9,000.00 Notes payable (non current) A/C 19,000.00 Clo. Bal. 125,000.00 Beg. Bal. Clo. Bal. Accrued liabilities payable A/c $ $ 2,600.00 2,600.00 2,600.00 2,600.00 (h) (h) 125,000.00 125,000.00 Common Stock A/C $ Beg. Bal. $ 9,500.00 1,000.00 (e) $ Cash A/C Investments (short term) A/C $ 3,200.00 8,400.00 Beg. Bal. Cash Clo. Bal. (a) Clo. Bal. 10,500.00 10,500.00 10,500.00 11,600.00 11,600.00 11,600.00 Additional paid in capital A/C $ $ 85,500.00 15,000.00 (e) $ Equipment A/C $ 50,000.00 4,800.00 19,200.00 Beg. Bal. Cash A/C Beg. Bal. Cash Notes payable (current) Cash Clo. Bal. Clo. Bal. (c) (c) 3,100.00 (0) 70,900.00 74,000.00 100,500.00 100,500.00 100,500.00 74,000.00 Retained Earnings A/C $ $ Intangibles A/C $ 4,400.00 2,400.00 $ 39,900.00 Beg. Bal. Cash A/C Clo. Bal. Beg. Bal. Clo. Bal. (g) 39,900.00 39,900.00 39,900.00 6,800.00 6,800.00 6,800.00
aNote: (D) Contract for hiring new president at the end of the year wil be shown in the notes to accounts along with the terms and conditions of the contract.