The December 31, 2007, balance sheet for Grogan Inc. is presented here. These are the only accounts

Question:

The December 31, 2007, balance sheet for Grogan Inc. is presented here. These are the only accounts on Grogan’s balance sheet. Amounts indicated by question marks (?) can be calculated using the additional information following the balance sheet.

Assets

Cash .................. $ 25,000

Accounts receivable (net) ............ ?

Inventory ................... ?

Property, plant, and equipment (net) .... 294,000

$432,000

Liabilities and Stockholders’ Equity

Accounts payable (trade) .......... $ ?

Income taxes payable (current) ........ 25,000

Long-term debt ............... ?

Common stock ............. 300,000

Retained earnings .............. ?

$ ?

Additional Information

Current ratio (at year end) 1.5 to 1.0

Total liabilities 4 Total stockholders’ equity 0.8

Gross margin percent 30%

Inventory turnover (Cost of goods sold 4

Ending inventory) 10.5 times

Gross margin for 2007 $315,000

Required

Determine the following.

a. The balance in trade accounts payable as of December 31, 2007.

b. The balance in retained earnings as of December 31, 2007.

c. The balance in the inventory account as of December 31, 2007.

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