Please Show All Work Involved Thank You The followlng Decemb

Please Show All Work Involved! Thank You!

The followlng December 31, 2018, fiscal year-end account balance information is avallable for the Stonebridge Corporation: Cash and cash equivalents Accounts receivable (net) Inventories Property, plant, and equipment (net) Accounts payable Wages payable Paid-in-capital $ 6,9e8 39,888 79,888 215,888 58,888 19,888 195,888 The only asset not listed is short-term Investments. The only liabilities not listed are a $49,000 note payable due In two years and related accrued Interest of $1,000 due In four months. The current ratio at year-end is 1.7:1 Required: Determine the following at December 31, 2018: 1. Total current assets 2. Short-term investments 3. Retained earnings

Solution

(1)Current liabilities=Account payable+wage payable+accrued interest

=$58,000+$19,000+$1,000

=$78000

Since Current ratio is 1.7:1,current assets is 1.7*$78,000

=$1,32,600

(2)short term investment=Current assets-cash and cash equivalent- account receivable-inventory

=$1,32,600-$6900-$39,000-$78,000

=$7700

(3)Finally to find retained earnings, just add up the two sides of the balance sheet to find the difference.

Cash and cash equivalents $ 6,900
Accounts receivable (net) 39,000
Inventories 79,000
Short term investments 7,700
Property, plant, and equipment (net) 2,15,000
Total Assets $3,47,600

Accounts payable 58,000
Wages payable 19,000
Interest payable 1,000
Note payable 49,000
Paid-in-capital 195,000
Retained Earnings ???
Total Liabilities & Equity $3,47,600 (must equal total assets)

Therefore Retained Earnings must be 25,600 for the balance sheet to be in balance.

$3,47,600--$58,000-$19,000-$1,000-$49,000-$1,95,000

$25,600