alyssa plastic company quiz accounting

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

Assets

Amount

Liabilities & Equity

Amount

Cash

$ 22,000

Accounts Payable

$ 15,000

Marketable Securities

3,000

Accrued Liabilities

4,000

Accounts Receivable

3,000

Notes Payable (Short Term)

7,000

Notes Receivable

1,000

Long-Term Notes Payable

47,000

Inventory

20,000

Common Stock

10,000

Equipment

50,000

Additional Paid-in Capital

80,000

Factory Building

90,000

Retained Earnings

31,000

Intangibles

5,000

Total Assets

$194,000

Total Liabilities & Equity

$194,000

During the current year, the company had the following summarized activities:

  • Purchased marketable securities for $10,000 cash.
  • Lent $5,000 to a supplier, who signed a two-year note.
  • Purchased equipment that cost $18,000; paid $5,000 cash and signed a one-year note for the balance.
  • 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.
  • Issued an additional 2,000 shares of $0.50 par value common stock for $11,000 cash.
  • Borrowed $9,000 cash as a short-term note payable from a local bank.
  • Purchased a patent for $3,000 cash.
  • Built an addition to the factory for $24,000; paid $8,000 in cash and signed a three-year note for the balance.
  • Returned defective equipment to the manufacturer, receiving a cash refund of $1,000.

Required

  • Create a journal entry for each transaction.
  • Prepare a balance sheet as of December 31 of the current year.
  • Analyze the financial status of the company over this last year.

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