In: Accounting
[The following information applies to the questions
displayed below.]
Cougar Plastics Company has been operating for three years. At
December 31 of last year 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 | Notes payable (long-term) | 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 current year, the company had the following summarized
activities:
Required: |
1. & 2. |
Post the current year transactions to T-accounts for each of the accounts on the balance sheet. (Two items have been given in the cash T-account as examples). |
4. Prepare a trial balance at December 31 of the current year.
5. Prepare a classified balance sheet at December 31 of the current year.
6.
Compute the current ratio for the current year. (Round your answer to 2 decimal places.)
T-ACCOUNTS | ||||||
NOTE:No accounting entry is required for hiring | ||||||
Cash | $23,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $22,000 | |||||
Short term investment | $10,000 | |||||
Notes Receivable | $5,000 | |||||
Equipment | $5,000 | |||||
Issue of commonstock | $22,000 | (11*2000) | ||||
Notes payable(short term) | $9,000 | |||||
Intangible asset | $3,000 | |||||
Factory building | $8,000 | |||||
Equipment | $1,000 | |||||
Closing Balance | $23,000 | |||||
Investment (Short term) | $13,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $3,000 | |||||
Cash | $10,000 | |||||
Closing Balance | $13,000 | |||||
Accounts Receivable | $3,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $3,000 | |||||
Closing Balance | $3,000 | |||||
Inventory | $20,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $20,000 | |||||
Closing Balance | $20,000 | |||||
Notes Receivable (Long term) | $6,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $1,000 | |||||
Cash | $5,000 | |||||
Closing Balance | $6,000 | |||||
Equipment | $67,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $50,000 | |||||
Purchase | $18,000 | |||||
Return of defective equipment | $1,000 | |||||
Closing Balance | $67,000 | |||||
Factory Building | $114,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $90,000 | |||||
Addition built | $24,000 | |||||
Closing Balance | $114,000 | |||||
Intangibles | $8,000 | |||||
Description | Debit | Credit | ||||
Beginning Balance | $5,000 | |||||
Cash | $3,000 | |||||
Closing Balance | $8,000 | |||||
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