Items 1 through 3 are based on the following:
The following trial balance of Mint Corp. at December 31, 2006, has been adjusted except for income tax expense.
|
Dr. |
Cr. |
|||
|
Cash |
$ |
600,000 |
||
|
Accounts receivable, net |
3,500,000 |
|||
|
Cost in excess of billings on long-term contracts |
1,600,000 |
|||
|
Billings in excess of costs on long-term contracts |
$ |
700,000 |
||
|
Prepaid taxes |
450,000 |
|||
|
Property, plant, and equipment, net |
1,480,000 |
|||
|
Note payable—noncurrent |
1,620,000 |
|||
|
Common stock |
750,000 |
|||
|
Additional paid-in capital |
2,000,000 |
|||
|
Retained earnings—unappropriated |
900,000 |
|||
|
Retained earnings—restricted for note payable |
160,000 |
|||
|
Earnings from long-term contracts |
6,680,000 |
|||
|
Costs and expenses |
5,180,000 |
|||
|
$ |
12,810,000 |
$ |
12,810,000 |
|
Other financial data for the year ended December 31, 2006, are
- Mint uses the percentage-of-completion method to account for long-term construction contracts for financial statement and income tax purposes. All receivables on these contracts are considered to be collectible within twelve months.
- During 2006, estimated tax payments of $450,000 were charged to prepaid taxes. Mint has not recorded income tax expense. There were no temporary or permanent differences, and Mint’s tax rate is 30%.
In Mint’s December 31, 2006 balance sheet, what amount should be reported as
Total retained earnings?
- $1,950,000
- $2,110,000
- $2,400,000
- $2,560,000
Total noncurrent liabilities?
- $1,620,000
- $1,780,000
- $2,320,000
- $2,480,000
Total current assets?
- $5,000,000
- $5,450,000
- $5,700,000
- $6,150,000