Question

Financial data for Tara's Construction Company are given below. All figures are in dollars. Use this data to construct a Balance Sheet for the company for the year ending December 31, 2018 and use your constructed statement to answer the following 5 questions fie, 11 through 15). NOTE: Not every item in the list below belongs sheet. However, other than what is listed and/or can be derived, there are no other accounts on Tara's balance sheet- use cash as a plug figure to balance the balance sheet. on the balance sheet - you have to use some given data to determine needed accounts for the balance Accounts payable Accruals Accumulated depreciation Additional paid in capital Begiming of year inventory Common stock (S1.25 par value) Cost of goods sold Current portion of Long-term debt Gross accounts receivable Gross fixed assets Long-term debt (excluding current portion) Purchases 398,700 84,500 2,659,800 471,500 874,500 1,546,300 1,624,500 122,600 546,200 7,589,600 2,589,600 1,601,400 1,205,300 10,600 187,400 Returns and allowa Short-term bank loan nces 11. What did Tara's Construction Company record as Total Current Assets on December 31, 2018 balance 12. What did Tara's Construction Company record as Total Current Liabilities on December 31, 2018 balance sheet? 13. What did Tara's Construction Company record as Total Assets on December 31, 2018 balance sheet? 14. What was Total Shareholder's Equity on Tara's Construction Company' December 31, 2018 balance 15. Tara's Construction Company reported net income for 2018 of S871,860 and the company paid dividends of S0.40 per share in 2018. Given this information (along with the data provided above), compute what Tara's Construction Company reported as retained earnings on its December 31, 2017 balance sheet? (Assume that no additional shares of stock were issued between December 31, 2017 and December 31,2018).

Answer 1

BALANCE SHEET
Current assets:
Cash (1676100-851400-546200)	278500
Accounts receivable	546200
Inventory (874500++1601400-1624500)	851400	1676100	[6605900-4929800]
Gross fixed assets	7589600
Accumulated depreciation	2659800	4929800
Total assets		6605900
Current liabilities:
Accounts payable	398700
Accruals	84500
Current portion of long term loan	122600
Short term bank loan	187400	793200
Long term debt		2589600
Total liabilities		3382800
Stockholders' equity:
Common stock	1546300
Additional paid in capital	471500
Retained earnings	1205300	3223100
Total liabilities and stockholders' equity		6605900
Total current assets	1676100
Total current liabilities	793200
Total assets	6605900
Total shareholder's equity	3223100
Retained earnings as on December 31, 2017 = 1205300-871860+494816 =	828256
Working notes:
Number of common stock = 1546300/1.25 =	1237040
Total dividends paid = 1237040*0.40 =	494816