Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following trial balance of AJ Company at December 31, 2017, has been adjusted except for income taxes. The income tax rate is 30%. DR

The following trial balance of AJ Company at December 31, 2017, has been adjusted except for income taxes. The income tax rate is 30%.


DR
CR
Accounts receivable, net
$725,000

Accounts payable


250,000
Accumulated depreciation


125,000
Cash
185,000

Contributed capital


650,000
Expenses
3,750,000

Goodwill
140,000

Prepaid taxes
225,000

Property, plant, and equipment
850,000

Retained earnings, 1/1/2017


350,000
Revenues


4,500,000


5,875,000
5,875,000


During 2017, estimated tax payments of $225,000 were paid and debited to prepaid taxes. There were no differences between financial statement and taxable income for 2017.

Included in accounts receivable is $400,000 due from a loyal customer. Special terms were granted to this customer to make payments of $100,000 semi-annually every March 1 and September 1.

In AJ Company's December 31, 2017 Balance Sheet, what amount should be reported as total retained earnings?

Step by Step Solution

3.44 Rating (160 Votes )

There are 3 Steps involved in it

Step: 1

Calculation of Retaimed Egonings po... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

7th Canadian Edition Volume 1

1119048508, 978-1119048503

More Books

Students also viewed these Accounting questions