Question

Presented below are a number of balance sheet items for Teal, Inc., for the current year, 2017.

Goodwill		$ 127,870		Accumulated Depreciation-Equipment		$ 292,320
Payroll Taxes Payable		180,461		Inventory		242,670
Bonds payable		302,870		Rent payable (short-term)		47,870
Discount on bonds payable		15,320		Income taxes payable		101,232
Cash		362,870		Rent payable (long-term)		482,870
Land		482,870		Common stock, $1 par value		202,870
Notes receivable		448,570		Preferred stock, $10 par value		152,870
Notes payable (to banks)		267,870		Prepaid expenses		90,790
Accounts payable		492,870		Equipment		1,472,870
Retained earnings		?		Debt investments (trading)		123,870
Income taxes receivable		100,500		Accumulated Depreciation-Buildings		270,520
Notes payable (long-term)		1,602,870		Buildings		1,642,870

Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of debt investments (trading) are the same.

Answer 1

TEAL INC.
Classified Balance Sheet
Assets
Current Assets:			:
Cash		$362,870
Notes receivable		$448,570
Inventory		$242,670
Prepaid expenses		$90,790
Short-term Investments - Trading		$123,870
Income taxes Receivable		$100,500
Total current assets			$1,369,270
Long Term Investments			Nil
Property, Land, and Equipment
Land		$482,870
Equipment	$1,472,870
Less: Accumulated Depreciation-Equipment	($292,320)	$1,180,550
Buildings	$1,642,870
Less: Accumulated Depreciation-Buildings	($270,520)	$1,372,350	$3,035,770
Intangible assets
Goodwill			$127,870
Total assets			4,532,910
Liabilities and Stockholders Equity
Current liabilites:
Notes Payable		$267,870
Accounts payable		$492,870
Payroll Taxes Payable		$180,461
Rent payable		$47,870
Income taxes payable		$101,232
Total current liabilites			$1,090,303
Long-term liabilites:
Bonds payable	$302,870
Less: Discount on bonds payable	($15,320)	$287,550
Notes payable		$1,602,870
Rent payable		$482,870
Total Long-term liabilites			$2,373,290
Total Liabilites			$3,463,593
Stockholder's Equity
Common Stock - 202,870 shares issued and Outstanding		$202,870
Preferred stock - 15,287 shares issued and Outstanding		$152,870
Retained earnings - (Note 1)		$713,577	$1,069,317
Liabilities and Stockholders Equity			$4,532,910

Note 1 - Calculation of Retained earnings from Balance sheet equation

Total assets = Total liabilities + Stockholder's Equity

Total assets = Total liabilities + Common stock + Preferred Stock + Retained Earnings

Therefore, Retained Earnings = Total assets - Total liabilities - Common stock - Preferred Stock

Retained Earnings = 4,532,910 - $3,463,593 - $202,870 - $152,870

Therefore, Retained Earnings = $713,577