Question

Fill in the blanks below with the correct entries. Round your answers to the nearest dollar.

Assets				Liabilities and Stockholders’ Equity
Current Assets				Current liabilities
Cash	$	200,000		Accounts payable	$	520,000
Accounts receivable				Notes payable to banks		190,000
($   less allowance for				Accrued wages
doubtful accounts of $35,000)		1,330,000		Taxes owed		110,000
Inventory		1,280,000		Total current liabilities	$	1,170,000
Total current assets	$			Long-term debt
Land				Stockholders’ equity
Plant and equipment				Common stock
($2,070,000 less				($1 par, 570,000
accumulated depreciation				shares authorized,
$   )		1,350,000		530,000 outstanding)
Total assets	$	4,470,000		Retained earnings
				Total stockholders’ equity	$	2,610,000
				Total liabilities and equity	$

Answer 1

Assets	Total	Total	Liability and Stock holder Equity	Total	Total
Current Assets			Current liabilities
Cash		$200,000	Accounts payable		$520,000
Accounts Receivable( WN 1)	1365000		Notes payable to Banks		$190,000
less: Allowance for Doubtful debts	35000*		Accrued Wages( WN 4)		$350,000
Net Account receivable		$1,330,000	Taxes Owed		$110,000
Inventory		$1,280,000
Total Current Assets( WN 2)		$2,810,000	Total Current liabilities		$1,170,000
Fixed Assets			Long term Debt( WN 6)		$690,000
Land		$310,000
Plant & Equipment	$2,070,000		Common stockv outstanding		$530,000
less: Accumulated Depreciation( WN 3)	$720,000		Retained Earnings( WN 5)		$2,080,000
Net plant & Equipment		$1,350,000	Total stockholders Equity( Common stock+Retained Earnings)		$2,610,000
Total Fixed Assets		$1,660,000
Total Assets(Fixed Assets+ Current Asses)]		$4,470,000	Total liabilities & Equity		$4,470,000

Wn : 1 - Gross Account receivable

Gross Account receivable - Allowance for Bad debts = Net Account receiavable

Gross Account receivable - $ 35000= $ 1330000

Gross Accounts receivable = $ 1330000+$ 35000= $ 1365000

WN 2: Computation of Total Current Assets

Total Current Assrets = Cash + Accounts receivable +Inventory

= $ 200000+$ 1330000+$ 1280000

= $ 2810000

WN: 3: Computation of Accumulated Depreciation on plant

Gross plant & Equipment - Accumulated Depreciation = Net plant & Equipment

$ 2070000-Accumulated Depreciation = $ 1350000

Accumulated Depreciation = $ 2070000-$ 1350000= $ 720000

WN 4: Computation of Accrued Wages

Given Total Current liabilitties = $ 1170000

Account payable + Notes payable + Accrued wages + Taxes owed = $ 1170000

$ 520000+$ 190000+Accrued wages+ $ 110000= $ 1170000

$ 820000+ Accrued Wages = $ 1170000

Accrued Wages = $ 1170000-$ 820000

Accrued Wages = $ 350000

WN :5 : Computationof Retained earnings

We know that Common stock + Retained Earning = Shareholders Equity

$ 530000+Retained Earnings = $ 2610000

Retained Earnings = $ 2610000- $ 530000= $ 2080000

WN : 6 - Computation of Long term Debt

We know that Total Assets = Total liabilities & Equity

Hence Total liabilities & Equity = $ 4470000

We also know that Current liabilities+ Long term debt + Shareholders Equityb = Total liabilities & Equity

$ 1170000+ long term debt + $ 2610000=$ 4470000

$ 3780000+ long term debt = $ 4470000

long term debt = $ 4470000-$ 3780000

Long term Debt = $ 690000

Hence the long term Debt = $ 690000.