Question

The balance sheet for Dresser Corporation at December 31, 2020, showed the following subtotals: Current liabilities 145,000 Property, plant and equipment 190,000 Total stockholders’ equity 290,000 Retained earnings 150,000 Total liabilities 220,000 Other long-term assets 150,000 Based on the above data, calculate the following amounts : 1. Current assets 2. Long-term liabilities 3. Contributed capital 4. Total liabilities and stockholders’ equity"

Answer 1

Answer and Explanation:

The computation is shown below;

1. The current asset is

= Total stockholder equity + total liabilities -  Property, plant and equipment  - Other long-term assets

= $290,000 + $220,000 - $190,000 - $150,000

= $170,000

2. The long term liabilities is

Total liabilities = current liabilities + long term liabilities

$220,000 = $145,000 + long term liabilities

SO, the long term liabilities is

= $220,000 - $145,000

= $75,000

3. The contributed capital is

Total stockholder equity = contributed capital + retained earnings

$290,000 = contributed capital = $150,000

So, the contributed capital is

= $290,000 - $150,000

= $140,000

4. Total liabilities and stockholders’ equity is

= total liabilities + stockholder equity

= $220,000 + $290,000

= $510,000