Question

Use your knowledge of balance sheets, what are the total liabilities and retained earnings in the text below, respectively? ASSETS LIABILITIES . Cash $ 50,000 Accounts payable $ 12,000 Accounts receivable 80,000 Notes payable 50,000 Inventory 100,000 Total current liabilities $ Total current assets $ Long-term debt 218,000 Gross P&E 730,000 Total liabilities $ Less accumulated Common stock 100,000 depreciation 130,000 Paid-in capital 250,000 Net P&E $600,000 Retained earnings Total assets $ Total stockholders’ equity $ 550,000 Total liabilities and equity $ a. 230,000; 280,000 b. 280,000; 200,000 c. 62,000; 200,000 d. 280,000; 230,000

Answer 1

B) 280,000; 200,000

Step-by-step explanation:

Assets = Liabilities + Shareholder Equity

Assets:

Cash $50,000

Accounts receivable $80,000

Inventory $100,000

Gross P&E $730,000

depreciation ($130,000)

total = $830,000

Liabilities:

Accounts payable $12,000

Notes payable $50,000

Long-term debt $218,000

total = $280,000

Equity = $830,000 - $280,000 = $550,000

Common stock $100,000

Add. paid-in capital $250,000

Retained earnings = $550,000 - $100,000 (common stock) - $250,000 (APIC) = $200,000