Determine the common stock for Bertinelli Corp. based on the following information: cash = $250,000; patents and copyrights = $720,000; accounts payable = $430,000; accounts receivable = $159,000; tangible net fixed assets = $4,300,000; inventory = $365,000; notes payable = $170,000; accumulated retained earnings = $1,245,000; long-term debt = $1,630,000.

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ranijoshijj97 ranijoshijj97 · Answer 1 · 2020-02-24T11:45:04+01:00

Answer:

The common stock amounts to $23,19,000

Explanation:

The common stock will computed by using the Accounting Equation which is:

Assets = Liabilities + Shareholders earnings

The equation involves:

Total asset = Current Liabilities + Long term debt + Common Stock (CS) + Retained Earnings

Computing the total assets:

Total assets (TA) = Cash + Patents and copyrights + Accounts receivable + Net fixed assets + Inventory

= $250,000 + $720,000 + $159,000 + $4,300,000 + $365,000

= $57,94,000

Computing Current Liabilities (CL) as:

CL = Accounts Payable + Notes Payable

= $430,000 + $170,000

= $600,000

Putting the values in the above formula:

$57,94,000 = $600,00 + $1,630,000 + CS + $1,245,000

$57,94,000 - $600,00 - $1,630,000 - $1,245,000 = CS

CS= $23,19,000