Question

The balance sheet for Dresser Corporation at December 31, 2020, showed the following subtotals: Current liabilities 145,000 Property, plant and equipment 190,000 Total stockholders’ equity 290,000 Retained earnings 150,000 Total liabilities 220,000 Other long-term assets 150,000 Based on the above data, calculate the following amounts : 1. Current assets 2. Long-term liabilities 3. Contributed capital 4. Total liabilities and stockholders’ equity"

Answer 1

Current assets are $75,000; long-term liabilities are $75,000; contributed capital is $140,000; total liabilities and stockholders' equity are $510,000. These figures are derived using basic accounting principles where the balance sheet must balance with assets equalling liabilities plus equity.

Step-by-step explanation:

To calculate the missing amounts on Dresser Corporation's balance sheet, we can use basic accounting equations. The balance sheet must balance, meaning that assets equal liabilities plus stockholders' equity.

1. Current assets can be found by subtracting current liabilities from total liabilities. Current assets = Total liabilities - Current liabilities = $220,000 - $145,000 = $75,000.
2. Long-term liabilities are the difference between total liabilities and current liabilities. Long-term liabilities = Total liabilities - Current liabilities = $220,000 - $145,000 = $75,000.
3. Contributed capital is calculated by deducting retained earnings from total stockholders' equity. Contributed capital = Total stockholders’ equity - Retained earnings = $290,000 - $150,000 = $140,000.
4. The sum of Total liabilities and stockholders' equity is calculated as follows: Total liabilities + Total stockholders' equity = $220,000 + $290,000 = $510,000.

Answer 2

Answer and Explanation:

The computation is shown below;

1. The current asset is

= Total stockholder equity + total liabilities - Property, plant and equipment - Other long-term assets

= $290,000 + $220,000 - $190,000 - $150,000

= $170,000

2. The long term liabilities is

Total liabilities = current liabilities + long term liabilities

$220,000 = $145,000 + long term liabilities

SO, the long term liabilities is

= $220,000 - $145,000

= $75,000

3. The contributed capital is

Total stockholder equity = contributed capital + retained earnings

$290,000 = contributed capital = $150,000

So, the contributed capital is

= $290,000 - $150,000

= $140,000

4. Total liabilities and stockholders’ equity is

= total liabilities + stockholder equity

= $220,000 + $290,000

= $510,000