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29 October, 04:05

Maddux, Inc., has completed its fiscal year and reported the following information. The company had current assets of $153,413, net fixed assets of $412,331, and other assets of $7,822. The firm also has current liabilities worth $65,314, long-term debt of $178,334, and common stock of $162,000. Calculate the amount of retained earnings. $243,648 $167,918 $573,566 $405,648

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  1. 29 October, 04:22
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    Retained earnings $ 167,918

    Explanation:

    To determine the amount of retained earnings, we need to consider the fundamental accounting equation of:

    Assets = Liabilities + Shareholders Equity

    The total assets are

    Total Assets: Current Assets + Net Fixed assets + Other assets

    $ 153,413 + $412,331 + $ 7,822 = $ 573,566

    Total Liabilities: Current liabilities + long term debt

    $ 65,314 + $ 178,334 = $ 243,648

    Common Stock = $ 162,000

    Any remaining amount after the amounts are inserted into the accounting equation is the retained earnings amount.

    $ 573,566 = $ 243,648 + $ 162,000 = $ 167,918
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