Question

penguin pucks, inc., has current assets of $3,400, net fixed assets of $18,500, current liabilities of $2,900, and long-term debt of $7,700.

Answer 1

Penguin Pucks, Inc.'s shareholders' equity can be calculated by subtracting total liabilities from total assets. Therefore, the shareholders' equity is $11,300.

Step-by-step explanation:

Penguin Pucks, Inc.'s shareholders' equity represents the residual interest of the owners in the company's assets after deducting liabilities. The formula for shareholders' equity is:

`\[ \text{Shareholders' Equity} = \text{Total Assets} - \text{Total Liabilities} \]`

Given the information provided:

`\[ \text{Total Assets} = \text{Current Assets} + \text{Net Fixed Assets} \]`

`\[ \text{Total Liabilities} = \text{Current Liabilities} + \text{Long-term Debt} \]`

Substituting the values:

`\[ \text{Total Assets} = $3,400 + $18,500 = $21,900 \]`

`\[ \text{Total Liabilities} = $2,900 + $7,700 = $10,600 \]`

Now, applying the formula:

`\[ \text{Shareholders' Equity} = $21,900 - $10,600 = $11,300 \]`

This means that the owners' claim on the company's assets, after satisfying all obligations, amounts to $11,300. Shareholders' equity is a crucial metric for assessing a company's financial health, as it represents the net worth attributable to the shareholders.

In summary, Penguin Pucks, Inc.'s shareholders' equity is $11,300, reflecting the residual value available to shareholders after covering all debts and obligations.