Performance Plastics Company (PPC) has been operating for three years. The begin
ID: 2330225 • Letter: P
Question
Performance Plastics Company (PPC) has been operating for three years. The beginning account balances are Cash Accounts Receivable Inventory Supplies Notes Receivable (due in three years) Equipment Buildings Land Accounts Payable Notes Payable (due in three years) Common Stock Retained Earnings 38,750 6,450 52,500 6,850 2,950 119,500 201,000 47,750 53,000 118,500 150,000 154,250 During the year, the company had the following summarized activities: a. Purchased equipment that cost $25,850; paid $6,350 cash and signed a two-year note for the balance b. Issued an additional 2,100 shares of common stock for $21,000 cash. c. Borrowed $83,500 cash from a local bank, payable June 30, in two years. d. Purchased supplies for $9,750 cash e. Built an addition to the factory buildings for $56,500; paid $18,500 in cash and signed a three-year note for the balance f Hired a new president to start January 1 of next year. The contract was for $95,000 for each full year workecd. RequirementGral Journal General Ledger Trial Balance Balance Sheet Analysis General Journal tab Prepare the journal entries to record the transactions (a) through (f). Review the 'General Ledger and the unadjusted 'Trial Balance Tabs to see the effect of the transactions on the account balances General Ledger tab Each journal entry is posted automatically to the general ledger Trial Balance tab The ending balance values from the General Ledger tab flows through to the Trial Balance tab Balance Sheet tab Prepare a classified balance sheet at December 31 Analysis tab-Using the information from the requirements above, complete the 'Analysis' tabExplanation / Answer
Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Equipment 25,850.00 Cash 6,350.00 Notes Payable (Long Term) 19,500.00 (To record the purchase of equipment) b. Cash 21,000.00 Common Stock 21,000.00 (To record the issue of common stock) c. Cash 83,500.00 Notes Payable (Long Term) 83,500.00 (To record the amount borrowed from Bank) d. Supplies 9,750.00 Cash 9,750.00 (To record the purchase of supplies) e. Buildings 56,500.00 Cash 18,500.00 Notes Payable 38,000.00 (To record the addition made to factory building) f. No Entry Answer 2. Cash Accounts Receivable Date Debit Credit Balance Date Debit Credit Balance 1-Jan 38,750.00 Dr. 1-Jan 6,450.00 Dr. a. 6,350.00 32,400.00 Dr. b. 21,000.00 53,400.00 Dr. c. 83,500.00 136,900.00 Dr. d. 9,750.00 127,150.00 Dr. e. 18,500.00 108,650.00 Dr. Inventory Supplies Date Debit Credit Balance Date Debit Credit Balance 1-Jan 52,500.00 Dr. 1-Jan 6,850.00 Dr. d. 9,750.00 16,600.00 Dr. Land Buildings Date Debit Credit Balance Date Debit Credit Balance 1-Jan 47,750.00 Dr. 1-Jan 201,000.00 Dr. e. 56,500.00 257,500.00 Dr. Equipment Notes Receivable (Long Term) Date Debit Credit Balance Date Debit Credit Balance 1-Jan 119,500.00 Dr. 1-Jan 2,950.00 Dr. a. 25,850.00 145,350.00 Dr. Accounts Payable Notes Payable (Long Term) Date Debit Credit Balance Date Debit Credit Balance 1-Jan 53,000.00 Cr. 1-Jan 118,500.00 Cr. a. 19,500.00 138,000.00 Cr. c. 83,500.00 221,500.00 Cr. e. 38,000.00 259,500.00 Cr. Common Stock Retained Earnings Date Debit Credit Balance Date Debit Credit Balance 1-Jan 150,000.00 Cr. 1-Jan 154,250.00 Cr. b. 21,000.00 171,000.00 Cr. Answer 3. PERFORMANCE PLASTICS COMPANY (PPC) Trial Balance Dec 31, 2019 Dr. Amt. Cr. Amt. Cash 108,650.00 Accounts Receivable 6,450.00 Inventory 52,500.00 Supplies 16,600.00 Land 47,750.00 Buildings 257,500.00 Equipment 145,350.00 Notes Receivable (Long Term) 2,950.00 Accounts Payable 53,000.00 Notes Payable (Long Term) 259,500.00 Common Stock 171,000.00 Retained Earnings 154,250.00 Total 637,750.00 637,750.00 - Answer 3. PERFORMANCE PLASTICS COMPANY (PPC) Balance Sheet Dec 31, 2019 Assets Current Assets Cash 108,650.00 Accounts Receivable 6,450.00 Inventory 52,500.00 Supplies 16,600.00 184,200.00 Non-Current Assets Land 47,750.00 Buildings 257,500.00 Equipment 145,350.00 Notes Receivable (Long Term) 2,950.00 453,550.00 Total Assets 637,750.00 Liabilities & Stockholders' Equity Liabilities Current Liabilities Accounts Payable 53,000.00 Long-Term Liabilities Notes Payable (Long Term) 259,500.00 Total Liabilities 312,500.00 Stockholders' Equity Common Stock 171,000.00 Retained Earnings 154,250.00 Total Stockholders' Equity 325,250.00 Total Liabilities & Stockholders' Equity 637,750.00 Answer 4. Liabilities - ($312,500 / $637,750) 49% Stockholders' Equity ($325,250 / $637,750) 51%