Question

Wims, Inc., has current assets of $4,900, net fixed assets of $27,300, current liabilities of $4,100, and long-term debt of $10,200. a. What is the value of the shareholders’ equity account for this firm? (Do not round intermediate calculations.) b. How much is net working capital? (Do not round i

Answer 1

Answer:

(a) $17,900

(b) $800

Explanation:

Given that,

Current assets = $4,900

Net fixed assets = $27,300

Current liabilities = $4,100

Long-term debt = $10,200

(a) Total assets = Current assets + Net fixed assets

                         = $4,900 + $27,300

                         = $32,200

Total liabilities = Current liabilities + Long-term debt

                        = $4,100 + $10,200

                        = $14,300

Equity = Total assets - Total liabilities

           = $32,200 - $14,300

           = $17,900

Therefore, the value of shareholder's equity is $17,900.

(b) Net working capital = Current assets - current liabilities

                                      = $4,900 - $4,100

                                      = $800