P2-3 Recording Transactions in T-Accounts, Preparing the Balance Sheet from a Trial Balance, and Evaluating the Current Ratio LO2-2, 2-4, 2-5
Cougar Plastics Company has been operating for three years. At December 31, 2014, 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		Long-term notes payable		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 year 2015, 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.	Purchased equipment that cost $18,000; paid $5,000 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 $85,000 per year plus options to purchase company stock at a set price based on company performance.
e.	Issued an additional 2,000 shares of $0.50 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:
1. & 2.	Record each necessary entry for the events in 2015 in T-accounts (including referencing) and determine the ending balances. The balances at the end of
	2014 have been entered as beginning balances for 2015.
	(Transaction (a) has been completed in the T-accounts as an example.)
Cash					Investments (short-term)
Beg. Bal.	22,000				Beg. Bal.	3,000
		10,000	(a)		(a)	10,000
		3,000	(g)		End. Bal.
End. Bal.
Accounts Receivable					Inventory
Beg. Bal.	3,000				Beg. Bal.	20,000
End. Bal.					End. Bal.
Notes Receivable (long-term)					Equipment
Beg. Bal.	1,000				Beg. Bal.	50,000
End. Bal.					End. Bal.
Factory Building					Intangibles
Beg. Bal.	90,000				Beg. Bal.	5,000
					(g)	3,000
End. Bal.					End. Bal.
Accounts Payable					Accrued Liabilities Payable
Beg. Bal.		15,000			Beg. Bal.		4,000
End. Bal.					End. Bal.
Notes Payable (short-term)					Long-Term Notes Payable
Beg. Bal.		7,000			Beg. Bal.		47,000
End. Bal.					End. Bal.
Common Stock					Additional Paid-in Capital
Beg. Bal.		10,000			Beg. Bal.		80,000
End. Bal.					End. Bal.
Retained Earnings
Beg. Bal.		31,000
End. Bal.
Required:
4	Prepare a trial balance at December 31, 2015.
	COUGAR PLASTICS COMPANY
	Trial Balance
	At December 31, 2015
	Account Titles	Debit	Credit
	Cash
	Investments (short-term)
	Accounts receivable
	Inventory
	Notes receivable (long-term)
	Equipment
	Factory building
	Intangibles
	Accounts payable
	Accrued liabilities payable
	Notes payable (short-term)
	Notes payable (long-term)
	Common stock
	Additional paid-in capital
	Retained earnings
	Totals	$243,000	$0
Required:
5	Prepare a classified balance sheet at December 31, 2015.
	COUGAR PLASTICS COMPANY
	Balance Sheet
	At December 31, 2015
	Assets		Liabilities
	Current assets:		Current liabilities:
			Total current liabilities	-
	Total current assets	-
	Non-current assets:
			Total liabilities	0
			Stockholders' Equity
	Total non-current assets	-	Total stockholders' equity	-
	Total assets	$ -	Total liabilities and stockholders' equity	$ -
Required:
6	Compute the current ratio for 2015. (Round your answer to 2 decimal places.)
	Current ratio

P2-3 Recording Transactions in T-Accounts, Preparing the Balance Sheet from a Trial Balance, and Evaluating the Current Ratio LO2-2, 2-4, 2-5 Cougar Plastics Company has been operating for three years. At December 31, 2014, the accounting records reflected the following: Cash Accounts payable 22,000 15,000 Investments (short-term) 3,000 Accrued liabilities payable 4,000 Accounts receivable Notes payable (short-term) 7,000 3,000 20,000 Long-term notes payable inventory 47,000 Notes receivable (long-term) 1,000 Common Stock 10,000 50,000 Additional paid-in capital Equipment 80,000 Factory building Retained earnings 90,000 31,000 Intangibles 5,000 During the year 2015, 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. Purchased equipment that cost $18,000; paid $5,000 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 $85,000 peryear plus options to purchase company stock at a set price based on company performance. e. Issued an additional 2,000 shares of$0.50 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