Question

3. National Shops, Inc. reported the following amounts on its balance sheet as of December 31, 2016: Inventory $325,000 Notes payable 100,000 Cash 150.000 Common stock 750,000 Net property, plant and equipment| 600,000 Accounts receivable 30.000 Accounts payable 45,000 Retained earnings Required: 1. What is the amount of National's total assets as of December 31, 2016? 2. Identify the items listed above that are liabilities. 3. What is the amount of National's retained earnings as of December 31, 2016? 4. Prepare a balance sheet for National at December 31, 2016.

Answer 1

Solution

For making solution to the above, we have to draw the balance sheet first, given as follows,

National Shops, Inc.
BALANCE SHEET
As at December 31, 2016
Assets		Amount ($)	Liabilities and Stockholders' Equity		Amount ($)
Current Assets:			Liabilities:
Cash		1,50,000.00	Notes Payable		1,00,000.00
Accounts Receivable		30,000.00	Accounts Payable		45,000.00
Inventory		3,25,000.00	Total Liabilities		1,45,000.00
Total Current Assets		5,05,000.00	Stockholders' Equity:
Non-Current Assets:			Common Stock	7,50,000.00
Net Property, Plant and Equipment	6,00,000.00	6,00,000.00	Retained Earnings
			(Balancing Figure)	2,10,000.00	9,60,000.00
TOTAL ASSETS		11,05,000.00	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		11,05,000.00

Now

(1) Total Assets = $1,105,000

(2) Items to be listed as liabilities:
- Notes Payable amounting to $100,000
- Accounts Payable amounting to $45,000
- Common Stock worth $750,000
- Retained Earnings

(3) Retained Earnings = $210,000