Question

Prepare a 2018 balance sheet for Rogers Corp. based on the following information: Cash = $360,000; Patents and copyrights = $760,000; Accounts payable = $500,000; Accounts receivable = $159,000; Tangible net fixed assets = $3,500,000; Inventory = $235,000; Notes payable = $180,000; Accumulated retained earnings = $1,265,000; Long-term debt = $1,530,000. What is the common stock account balance for the company?

Answer 1

Solution :

As per the basic accounting equation

Total Assets – Total Liabilities = Stockholder’s equity

Elaborating the same we have

Current Assets + Tangible Fixed Assets + Intangible Fixed assets - Current Liabilities – Long term debt = Common stock + Retained earnings

As per the information given in the question we have

Current Assets = Cash + Accounts Receivable + Inventory

= $ 360,000 + $ 159,000 + $ 235,000 = $ 754,000

Thus the current assets = $ 754,000  

Tangible Fixed Assets = $ 3,500,000    ; Intangible Fixed Assets = $ 760,000   

As per the information given in the question we have

Current Liabilities = Accounts Payable + Notes Payable

= $ 500,000 + $ 180,000 = $ 680,000

Long term debt = $ 1,530,000    ;   Accumulated Retained Earnings = $ 1,265,000

Applying the above information in the Accounting equation we have

$ 754,000 + $ 3,500,000 + $ 760,000 - $ 680,000 - 1,530,000 = Common stock + $ 1,265,000

$ 2,804,000 = Common Stock + $ 1,265,000

Common Stock + $ 1,265,000 = $ 2,804,000

Common Stock = $ 2,804,000 - $ 1,265,000 = $ 1,539,000

The common stock account balance for the company = $ 1,539,000

Please find the attached screenshot of the excel sheet containing the Balance sheet for Rogers Corp.