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Homework answers / question archive / The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation: Cash and cash equivalents Accounts receivable (net) Inventory Property, plant, and equipment (net) Accounts payable Salaries payable Paid-in capital $ 5,900 29,000 69,000 165,000 48,000 20,000 145,000 The only asset not listed is short-term investments

The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation: Cash and cash equivalents Accounts receivable (net) Inventory Property, plant, and equipment (net) Accounts payable Salaries payable Paid-in capital $ 5,900 29,000 69,000 165,000 48,000 20,000 145,000 The only asset not listed is short-term investments

Accounting

The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation: Cash and cash equivalents Accounts receivable (net) Inventory Property, plant, and equipment (net) Accounts payable Salaries payable Paid-in capital $ 5,900 29,000 69,000 165,000 48,000 20,000 145,000 The only asset not listed is short-term investments. The only liabilities not listed are $39.000 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: 1. Total current assets 2. Short-term investments 3. Retained earnings

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1 Total current asset $110400
2 Short term investment $6500
3 Retained earnings $22400

Workings

1. total current liabilities = account payable + wages payable + accrued interest

= 48000 + 20000 + 1000

=69000

with the current ratio of 1.6:1 , that means total current asset are 1.6 times the total current liabilities. So,

total current asset = 69000*1.6 = 110400

2. Short term investment = total current asset - cash - account recievable - inventories

= 110400 - 5900 - 29000 - 69000

= 6500

3.

cash and cash equivalents 5900
account recievables 29000
inventories 69000
short term investments 6500
PPE (net) 165000
Total asset 275400
Accounts payable 48000
wages payable 20000
interest payable 1000
note payable 39000
paid in capital 145000
Retained earnings ??
total equity and liabilities 275400

so retained earnings = 275400 - 253000

= 22400