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Injection Plastics Company has been operating for three years. At December 31, 2020, the accounting records reflected the following: Cash $ 24,500 Intangibles $ 3,700
Injection Plastics Company has been operating for three years. At December 31, 2020, the accounting records reflected the following:
Cash | $ | 24,500 | Intangibles | $ | 3,700 | |
Investments (short-term) | 2,700 | Accounts payable | 15,700 | |||
Accounts receivable | 3,700 | Accrued liabilities | 2,700 | |||
Inventories | 27,500 | Short-term borrowings | 7,700 | |||
Notes receivable (long-term) | 1,700 | Notes payable (long-term) | 51,500 | |||
Equipment | 51,500 | Contributed capital | 97,000 | |||
Factory building | 93,500 | Retained earnings | 34,200 | |||
During the year 2021, the following summarized transactions were completed:
- Purchased equipment that cost $19,400; paid $6,700 cash and signed a one-year note for the balance.
- Issued 2,700 additional shares for $16,200 cash.
- Lent $7,700 to a manager, who signed a two-year note.
- Purchased short-term investments for $9,700 in cash.
- Paid $5,700 on the note in transaction (a).
- Borrowed $12,700 cash on December 31, 2021, from the bank and signed a note, payable June 30, 2022.
- Purchased a patent (an intangible asset) for $3,700 cash.
- Built an addition to the factory for $27,100; paid $9,700 in cash and signed a three-year note for the balance.
- Hired a new president at the end of the year. The contract was for $88,500 per year plus options to purchase company shares at a set price based on company performance.
- Returned defective equipment to the manufacturer, receiving a cash refund of $1,700
- .
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