Final answer:
Total current assets and retained earnings of Stonebridge Corporation are determined using the given account balances and applying the current ratio at the year-end. Short-term investments are calculated by subtracting known current assets from the total current assets. Retained earnings are found by completing the balance sheet and ensuring both sides balance.
Step-by-step explanation:
Total current assets are calculated by adding cash and cash equivalents, accounts receivable, inventory, and short-term investments. Short-term investments can be determined by using the current ratio, which is given as 1.5:1. Retained earnings are calculated by recognizing that a corporation's balance sheet must balance; this is done by adding total assets (including calculated short-term investments) and subtracting total liabilities (including notes payable and interest payable) and shareholder's equity, excluding retained earnings.
To find short-term investments, first calculate current liabilities, which are the sum of accounts payable, salaries payable, notes payable, and interest payable. Then, apply the current ratio to determine total current assets, which should be 1.5 times the total current liabilities. With that total current assets value, subtract the known current asset figures to find the value of short-term investments.
Then, calculate the total liabilities and equity side of the balance sheet, which includes accounts payable, salaries payable, notes payable, accrued interest payable, paid-in capital, and retained earnings. Subtract all known liabilities and equity from the total assets (including calculated short-term investments) to find retained earnings.