Based On The Following Data And Assuming That The Common Stock Account Balance Is $48,000, What Is The Balance In Retained Earnings?
The correct answer of this multiple choice question (mcq) is (D), as proved below: We know that total assets are equal to total liabilities plus shareholders’ equity as shown by the following accounting equation formula: Assets = Liabilities + Equity We are given the following accounting data: Total Assets = Current Assets + Fixed Assets We have CA and FA from the given accounting data as shown below: Current Assets = Cash + Accounts Receivable + Inventory + Supplies Current Assets = $70,000 + $50,000 + $138,000 + $8,000 = $266,000 Fixed assets or non-current assets include the following: Fixed Assets = Buildings + Equipment = $160,000 + $340,000 = $500,000 So, by putting the values in current assets equation, we have total assets on balance sheet: Total Assets = $266,000 + $500,000 = $766,000 Total Liabilities = Current Liabilities + Long-Term Liabilities = $618,000 + $0 = $618,000 Current Liabilities = Accounts Payable + Accrued Expenses + Utility Expenses Payable Current ...