Question

1. The accountant for the Times Corporation prepared the following list from the company’s accounting records for the year ended 30 June 2020.

Retained earnings	?	Prepaid expenses	$ 50 000
Cash	$ 77 000	Contributed equity	400 000
Accounts payable	50 000	Accounts receivable	170 000
Sales revenue	955 000	Interest income	50 000
Cost of sales	700 000	Salary expense	140 000
Land	750 000	Income tax expense	20 000
Notes payable	450 000	Selling expense	45 000
Inventory	200 000	Salaries payable	40 000

Determine the total liabilities at the end of 2020 financial year.

Answer 1

Times Corporation

Balance sheet 2020

	$
Cash	77000
Account receivable	170000
Inventory	200000
Prepaid expense	50000
Land	750000
Total Asset	1,247,000
Liabilities
Account Payable	50000
Salaries payable	40000
Notes Payable	450000
Total current liabilities	540000
Stock holder's Equity
Common Stock	400000
retained earnings	307000 balancing figure [1247000-50000-40000-450000-400000]
Total Shareholder equity	400000+retained earnings
Total Liabilities	1,247,000

Total Asset = current liabilities +shareholder's equity

1247000 = 540000+400000+retained earnings

retained earnings = 1247000-940000

=307000$

Total Liabilities = 1,247,000$ [540000+400000+307000]