Answered

Get expert advice and community support for all your questions on IDNLearn.com. Discover detailed and accurate answers to your questions from our knowledgeable and dedicated community members.

The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation:
Cash and cash equivalents
Accounts receivable (net) 5,700
Inventory l 27,000
Property, plant, and equipment (net) 67,000
Accounts pay able 46,000
Salaries payable 18,000
Paid-in capitapoints 135,000
The only asset not listed is short-term investments. The only liabilities not listed are $37000 notes payable due in two years and related accrued interest of $1,000 due in four months. The current ratio at year-end is 1.6:1
Required: Determine the following at December 31, 2021:
1. Total current assets
2. Short-term investments
3. Retained earnings

Sagot :

Answer:

1. Total current assets = $104,000

2. Short term investments = $4,300

3. Retained earnings = $27,000

Explanation:

Note: The data given in the question are not complete and merged together. The complete sorted data are  now given as follows:

Details                                                     Amount ($)

Cash and cash equivalents                       5,700

Accounts receivable (net)                         27,000

Inventory                                                    67,000

Property, plant, and equipment (net)      160,000

Accounts pay able                                     46,000

Salaries payable                                         18,000

Paid-in capital                                           135,000

The explanation of the answer is now given as follows:

1. Total current assets

Current liabilities =  Accounts playable + Salaries payable + Accrued interest = $46,000 + $18,000 + $1,000 = $65,000

Current ratio = 1.6:1

Current ratio = Current assets / Current liabilities .............. (1)

Substituting the relevant values into equation (1) ans solve for Current assets, we have:

1.6 = Current assets / $65,000

Current assets = 1.6 * $65,000 = $104,000

Therefore, wee have:

Total current assets = $104,000

2. Short-term investments

Current assets = Cash and cash equivalents + Accounts receivables + Inventory + Short term investments ............... (2)

Substituting the relevant values into equation (2) ans solve for Short-term investments, we have:

$104,000 = $5,700 + $27,000 + $67,000 + Short term investments

$104,000 = $99,700 + Short term investments

Short term investments = $104,000 - $99,700 = $4,300

3. Retained earnings

Long term liabilities = Notes payable due in two years = $37,000

Fixed assets = Property, plant, and equipment (net) = $160,000

Current assets + Fixed assets = Current liabilities + Long term liabilities + Paid in capital + Retained earnings ................. (3)

Substituting the relevant values into equation (3) ans solve for Retained earnings, we have:

$104,000 + $160,000 = $65,000 + $37,000 + $135,000 + Retained earnings

$264,000 = $237,000 + Retained earnings

Retained earnings = $264,000 - $237,000 = $27,000

We appreciate your participation in this forum. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. IDNLearn.com is committed to providing accurate answers. Thanks for stopping by, and see you next time for more solutions.