Jaguar Plastics Company has been operating for three years. At December $31$ of last year, the accounting records reflected the following: Jaguar Plastics Company has been operating for three years. At December $31$ of last year, the accounting records reflected the following:

During the current year, 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$.$ Leased equipment that cost $$18,000$; paid $$5,000$ cash and signed a five$-$year right$-$of$-$use lease 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. The new president begins her position on January $1$ of next year.

$e.$ Issued an additional $2,000$ shares of $$0\mathrm{.}50$ par value common stock for $$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.$

During the current year, 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$.$ Leased equipment that cost $$18,000$; paid $$5,000$ cash and signed a five$-$year right$-$of$-$use lease 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. The new president begins her position on January $1$ of next year.

$e.$ Issued an additional $2,000$ shares of $$0\mathrm{.}50$ par value common stock for $$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:

Create T$-$accounts for each of the accounts taken from the accounting records shown above and enter the end$-$of$-$year balances as the

beginning balances for the current year.

Record each of the events for the current year in $T-$accounts $($including referencing$)$ and determine the ending balances.

Explain your response to event $(d).$

Prepare a trial balance at December $31$ of the current year.

Prepare a classified balance sheet at December $31$ of the current year. Include a good heading.

Compute the current ratio for the current year. Round to two decimal places. What does this suggest about Jaguar Plastics?