I am going over an old exam question and not sure how to approach Question 15. Any help or suggestions would greatly be appreciated.
For Question 14, the current assets is B) $5,655,000 right?
Because I do not need to "property, plant, and equipment"
For Question 15, I am completely lost and have no idea how to tackle this problem. Please advise on what the first few steps should be... I am completely lost here.
Sometimes the link above is dead so I will post the Question below as well:
The following trial balance of Trane Corp. at December 31, 2001 has
been properly adjusted except for the income tax expense adjustment.
December 31, 2001
Cash $ 875,000
Accounts receivable (net) 2,695,000
Property, plant, and equipment (net) 7,366,000
Accounts payable and accrued liabilities $ 1,501,000
Income taxes payable 654,000
Deferred income tax liability 85,000
Common stock 2,350,000
Additional paid-in capital 3,680,000
Retained earnings, 1/1/01 3,650,000
Net sales and other revenues 13,360,000
Costs and expenses 11,080,000
Income tax expenses 1,179,000
Other financial data for the year ended December 31, 2001:
Included in accounts receivable is $960,000 due from a
customer and payable in quarterly installments of $120,000. The last
payment is due December 29, 2003.
The balance in the Deferred Income Tax Liability account
pertains to a temporary difference that arose in a prior year, of
which $20,000 is classified as a current liability.
During the year, estimated tax payments of $425,000 for the year 2002
were charged to income tax expense.
14. The current assets total is
15. The final retained earnings balance is