Question

Balance Sheet Missing element problem.Plz help?

I tried but didn't make it correct.Can anyone plz help?
The following December 31, 2009, fiscal year-end account balance information is available for the Stonebridge Corporation:
Cash and cash equivalents $ 5,000
Accounts receivable (net) 20,000
Inventories 60,000
Property, plant, and equipment (net) 120,000
Accounts payable 44,000
Wages payable 15,000
Paid-in-capital 100,000
The only asset not listed is short-term investments. The only liabilities not listed are a $30,000 note payable due in two years and related accrued interest of $1,000 due in four months. The current ratio at year-end is 1.5:1.
Required:
Determine the following at December 31, 2009:
Total current assets ??
Short-term investments ??
Retained earnings ??

Answer 1

1. Current ratio = Total current assets / Current liabilities

Total current assets = Current liabilities * Current ratio

Total current assets = ($44,000 + $15,000 + $1,000) + 1.5

Total current assets = $60,000 * 1.5

Total current assets = $90,000

2. Short Investments = Total current assets - (Cash + Accounts receivable + Inventories)

Short Investments = $90,000 - ($5,000 + $20,000 + $50,000)

Short Investments = $90,000 - $75,000

Short Investments = $15,000

3.Calculation of Retained earnings

Total assets = Long term assets + Current assets = $120,000 + $90,000 + $210,000

Retained earnings = Total assets - (Current liabilities + Long term liabilities + Paid in capital

Retained earnings = $210,000 - ($60,000 + $30,000 + $100,000)

Retained earnings = $210,000 - $190,000

Retained earnings = $20,000