Determine the amount of short-term investments


Response to the following problem:

The following financial information is available for Maxim Enterprises Limited for the year ended December 31, 2018:

a. The acid-test ratio is 1.5 to 1.

b. Accounts receivable is $3,000, which is one-half of the quick assets, one-third of the current assets, and twice the amount of property, plant, and equipment at carrying amount.

c. Notes payable is a long-term liability; it is four times the dollar amount of the short-term investments.

d. Total shareholders' equity is equal to the working capital, and common shares are 150% of the dollar amount of the retained earnings.

Required:

Using this information, prepare the company's balance sheet at December 31, 2018. Assume that other than retained earnings, there are no additional accounts.

 

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Financial Accounting: Determine the amount of short-term investments
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