Comprehensive analysisThe December 31, 2005, balance sheet for Webb Corporation is present

Comprehensive analysis

The December 31, 2005, balance sheet for Webb Corporation is presented here. These are the only accounts on Webb’s balance sheet. Amounts indicated by question marks (?) can be calculated using the following additional information.

AssetsCash

Accounts Receivable (net)$ 50,000

?

Inventory

 ?

Property, Plant, and Equipment (net)

588,000

 

$864,000

Liabilities and Stockholders’ Equity

Accounts Payable (trade)

$ ?

Income Taxes Payable (current)

50,000

Long-Term Debt

?

Common Stock

600,000

Retained Earnings

?

Additional Information

Current Ratio (at year end)

1.5 to 1.0

Total Liabilities ÷ Total Stockholders’ Equity

0.8

Gross Margin Percent

30%

Inventory Turnover (Cost of Goods Sold ÷

 

Ending Inventory)

10.5 times

Gross Margin for 2005

$630,000    

Required

Determine the following.

a. The balance in trade accounts payable as of December 31, 2005.

b. The balance in retained earnings as of December 31, 2005.

c. The balance in the inventory account as of December 31, 2005. (Assume that the level of inventory did not change from last year.)