Computing Retained Earnings and Preparing a Classified Balance Sheet

The following data, in no particular order, are from the accounts of Brown Corp. as of December 31, 2020, its annual year-end. All amounts are accurate, all accounts have normal balances, and total debits equal total credits.

Accounts payable (trade)$12,800Deferred revenue$3,200Debt retirement fund (long-term)6,400Cash dividends payable8,000Accounts receivable27,200Inventory48,000Income taxes payable6,400Land held for future business site28,800Short-term investments, marketable securities

(cost which approximates fair value)

16,000Equipment and furniture112,000Bonds payable (long-term)81,600Net income for 202056,000Accumulated depreciation, equipment and

furniture

9,600Dividends (cash) declared (a debit)4,800Common stock, par $1 (100,000 shares

authorized)

112,000Prepaid expenses (short-term)1,600Cash32,000Patent6,400Retained earnings, December 31, 201927,200Prepaid rent (long-term)3,200Allowance for doubtful accounts3,200Investment in capital stock of Zinc Products

Corporation (long-term)

41,600Premium on common stock8,000

Required

a.Compute the year-end balance of retained earnings. $Answer

b. classified balance sheet as of December 31, 2020.

• Do not use negative signs with any of your answers.
• List investments and current liabilities in the order of the largest dollar amount to the smallest dollar amount.