Question

Corporation ended its fiscal year on September​ 30, 2018​, with cash of $ 81 ​million, accounts receivable of $ 21 ​million, property and equipment of $ 29 ​million, and other​ long-term assets of $ 17 million. The​ company's liabilities consist of accounts payable of $ 30 million and​ long-term notes payable of $ 18 million. Terrance Corporation has total​ stockholders' equity of $ 100 ​million; of this​ total, common stock is $ 34 million. Solve for the​ company's ending retained earnings and then prepare Terrance ​Corporation's balance sheet at September​ 30, 2018. Use a proper heading on the balance sheet.

Answer 1

Terrance Corporation's ending retained earnings are calculated to be $66 million. This was determined by subtracting the common stock value ($34 million) from the total stockholders' equity ($100 million). The balance sheet as of September 30, 2018, shows total assets and total liabilities and stockholders' equity both equal to $148 million.

Step-by-step explanation:

To calculate the company's ending retained earnings for Terrance Corporation, we need to start with the total stockholders' equity and subtract the common stock. Given that the total stockholders' equity is $100 million and the common stock is valued at $34 million, the ending retained earnings can be calculated as follows:

Ending Retained Earnings = Total Stockholders' Equity - Common Stock

= $100 million - $34 million

= $66 million

Now, let's prepare Terrance Corporation's balance sheet as of September 30, 2018:

Terrance Corporation

Balance Sheet

September 30, 2018

• Assets:
  • Cash: $81 million
  • Accounts Receivable: $21 million
  • Property and Equipment: $29 million
  • Other Long-term Assets: $17 million
• Total Assets: $148 million

• Liabilities:
  • Accounts Payable: $30 million
  • Long-term Notes Payable: $18 million
• Total Liabilities: $48 million

• Stockholders' Equity:
  • Common Stock: $34 million
  • Retained Earnings: $66 million
• Total Stockholders' Equity: $100 million

Total Liabilities and Stockholders' Equity: $148 million

Answer 2

Retained Earnings = Total Stockholders Equity - Common stock = 100-34 = 66 Million

Terrance ​Corporation

Balance Sheet as at September​ 30, 2018

Millions Millions

Assets

Non Current Assets

Property and Equipment $29

Long term Assets $17

Total Non Current Assets $46

Current Asset

Cash $81

Account Receivable $21

Total Current Assets $102

Total Assets $148

Equity and Liabilities

Equity

Common Stock $34

Retained Earning $66

Total Stockholder's Equity $100

Liabilities

Non Current Liabilities

Long Term Note Payable $18

Current Liabilities

Account Payable $30

Total Liabilities $48

Total Equity and Liabilities $148