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The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation:

Cash and cash equivalents $5,600
Accounts receivable (net) 26,000
Inventory 66,000
Property, plant, and equipment (net) 150,000
Accounts payable 45,000
Salaries payable 17,000
Paid-in capital 130,000

The only asset not listed is short-term investments. The only liabilities not listed are $36,000 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:

Total current assets
Short-term investments
Retained earnings

Sagot :

Answer and Explanation:

The computation is shown below:

1)

Total current assets of $100,800

2)

Short term investments = Total current assets - Cash and cash equivalents - Accounts receivable - Inventory

= $100,800 - $5,600 - $26,000 - $66,000

= $3,200

3)

Retained earnings = Property plant and equipment + Total current assets - Total liabilities - Paid in capital

where,

Total liabilities = Accounts payable + Salaries payable + Accrued interest + Notes payable

= $45,000 + $17,000 + $1,000 + $36,000

= $99,000

SO,

Retained earnings = $150,000 + $100,800 - $99,000 - $130,000

= $21,800

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