Items 1 and 2 are based on the following:
The following trial balance of Trey Co. at December 31, 2006, has been adjusted except for income tax expense.
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|
Dr. |
Cr. |
|
|
Cash |
$ 550,000 |
|
|
Accounts receivable, net |
1,650,000 |
|
|
Prepaid taxes |
300,000 |
|
|
Accounts payable |
$ 120,000 |
|
|
Common stock |
500,000 |
|
|
Additional paid-in capital |
680,000 |
|
|
Retained earnings |
630,000 |
|
|
Foreign currency translation adjustment |
430,000 |
|
|
Revenues |
3,600,000 |
|
|
Expenses |
2,600,000 |
|
|
$5,530,000 |
$5,530,000 |
Additional information
- During 2006, estimated tax payments of $300,000 were charged to prepaid taxes. Trey has not yet recorded income tax expense. There were no differences between financial statement and income tax income, and Trey’s tax rate is 30%.
- Included in accounts receivable is $500,000 due from a customer. Special terms granted to this customer require payment in equal semiannual installments of $125,000 every April 1 and October 1.
In Trey’s December 31, 2006 balance sheet, what amount should be reported as total current assets?
- $1,950,000
- $2,200,000
- $2,250,000
- $2,500,000
In Trey’s December 31, 2006 balance sheet, what amount should be reported as total retained earnings?
- $1,029,000
- $1,200,000
- $1,330,000
- $1,630,000