Question

Jaguar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash Investments (short-term) Accounts receivable Inventory Notes receivable (long-term) Equipment Factory building Intangibles $ 26,000 Accounts payable 2,400 Accrued liabilities payable 4,100 Notes payable (current) 26,000 Notes payable (noncurrent) 1,800 Common stock 53,000 Additional paid-in capital 94,000 Retained earnings 3,700 $ 16,000 2,700 6,200 44,000 9,900 89,100 43, 100

During the current year, the company had the following summarized activities:
a. Purchased short-term investments for $8,300 cash.
b. Lent $5,300 to a supplier who signed a two-year note.
c. Purchased equipment that cost $28,000; 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 $81,000 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 2,100 shares of $0.50 par value common stock for $14,000 cash.
f. Borrowed $17,000 cash from a local bank, payable in three months.
g. Purchased a patent (an intangible asset) for $2,800 cash.
h. Built an addition to the factory for $25,000; paid $7,300 in cash and signed a three-year note for the balance.
i. Returned defective equipment to the manufacturer, receiving a cash refund of $1,200.
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).
Cash 26,000 Investments (short-term) 2,400 Beg. Bal. Beg. Bal. 8,300 (a) 5,300 (6) 5,000 (c) (d) End. Bal. 2,400 End. Bal. 7,400 Accounts Receivable 4,100 Inventory 26,000 Beg. Bal. Beg. Bal. End. Bal. 4,100 End. Bal. 26,000 Notes Receivable (long-term) 1,800 Equipment 53,000 Beg. Bal. Beg. Bal. End. Bal. L 1,800 End. Bal. 53,000

Answer 1

To set up the T-account balance sheet for the bank, list reserves, government bonds, and loans as assets and deposits as liabilities. The bank's net worth is calculated by subtracting total liabilities from total assets, resulting in a net worth of $220.

Step-by-step explanation:

The question relates to setting up a T-account balance sheet for a bank and calculating its net worth. Based on the given information, the bank's T-account would list its assets and liabilities. The assets include reserves, government bonds, and loans made. The liabilities consist of deposits from customers. To calculate the net worth, also known as the bank's equity, we subtract the total liabilities from the total assets.

Here is the T-account balance sheet:

• Assets
  
• Liabilities
  

Now, to calculate the net worth:

Net Worth = Total Assets - Total Liabilities

Net Worth = ($50 + $70 + $500) - $400

Net Worth = $620 - $400

Net Worth = $220

Thus, the bank's net worth is $220.

Answer 2

Jaguar Plastics Company

T- Accounts:

Cash

Account Titles Debit Credit

Beginning balance $16,000

a. Short-term Investments $8,300

b. Note receivable (long-term) 5,300

c. Equipment 5,000

e. Common stock 1,050

e. Additional Paid-in Capital 12,950

f. Note payable (current) 17,000

g. Intangible 2,800

h. Factory Building 7,300

i. Equipment (refund) 1,200

Investments (short-term)

Account Titles Debit Credit

Beginning balance $2,700

a. Cash 8,300

Accounts receivable

Account Titles Debit Credit

Beginning balance $6,200

Inventory

Account Titles Debit Credit

Beginning balance $44,000

Notes receivable (long-term)

Account Titles Debit Credit

Beginning balance $ 9,900

b. Cash 5,300

Equipment

Account Titles Debit Credit

Beginning balance $89,100

c. Cash 5,000

c. Note Payable (short) 23,000

i. Cash (refund) $1,200

Factory building

Account Titles Debit Credit

Beginning balance $43,100

h. Cash 7,300

h. Note payable

(non-current) 15,700

Intangibles

Account Titles Debit Credit

Beginning balance $26,000

g. Cash $2,800

Accounts payable

Account Titles Debit Credit

Beginning balance $2,400

Accrued liabilities payable

Account Titles Debit Credit

Beginning balance 4,100

Notes payable (current)

Account Titles Debit Credit

Beginning balance 26,000

c. Equipment 23,000

f. Cash 17,000

Notes payable (noncurrent)

Account Titles Debit Credit

Beginning balance 1,800

h. Factory Building 15,700

Common stock

Account Titles Debit Credit

Beginning balance 53,000

e. Cash 1,050

Additional paid-in capital

Account Titles Debit Credit

Beginning balance 94,000

e. Cash 12,950

Retained earnings

Account Titles Debit Credit

Beginning balance 3,700

Step-by-step explanation:

a) Data and Calculations:

Trial Balance as at December 31:

Debit Credit

Cash $16,000

Investments (short-term) 2,700

Accounts receivable 6,200

Inventory 44,000

Notes receivable (long-term) 9,900

Equipment 89,100

Factory building 43,100

Intangibles $26,000

Accounts payable 2,400

Accrued liabilities payable 4,100

Notes payable (current) 26,000

Notes payable (noncurrent) 1,800

Common stock 53,000

Additional paid-in capital 94,000

Retained earnings 3,700

Totals $211,000 $211,000