Answer and Explanation:
1. Total current assets
As we know that
Current ratio = Current assets ÷ current liabilities
Current liabilities is
= Accounts payable + Accrued interest + Salaries payable
= $50,000 + $1,000 + $22,000
= $73,000
And,
Current ratio = 1.5:1
So,
Total current assets is
= 1.5 × $73,000
= $109,500
b. Short term investment is
Short term investment = Total current assets - Cash and cash equivalents - Accounts receivables - Inventories
= $109,500 - ($6,100 + $31,000 + $71,000)
= $1,400
c. Now retained earning is
Total assets
= Total current assets + Property, plant and equipment
= $109,500 + $175,000
= $284,500
Total liabilities is
= Current liabilities + Notes payable
= $73,000 + $41,000
= $114,000
Retained earnings is
= Total assets - Total liabilities - Paid in capital
= $284,500 - $114,000 - $155,000
= $15,500
