Plastics Company has been operating for three years. At December 31 of lastyear, the accounting records reflected the following:Cash$22,000Accounts payable$15,000Investments (short-term)3,000Accrued liabilities payable4,000Accounts receivable3,000Notes payable (current)7,000Inventory20,000Notes payable (noncurrent)47,000Notes receivable (long-term)1,000Common stock10,000Equipment50,000Additional paid-in capital80,000Factory building90,000Retained earnings31,000Intangibles5,000During 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. 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 companyperformance. The new president begins her position on January 1 of next year.
