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Cori's Corporation, has a book value of equity of $14,130. Long-term debt is $8,150. Net working capital, other than cash, is $2,140. Fixed assets are $19,470 and current liabilities are $1,760.

How much cash does the company have?
Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.

What is the value of the current assets?
Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.

User Ronag
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1 Answer

1 vote

Final answer:

The cash Cori's Corporation has is calculated to be $1,090 by using the accounting equation and rearranging it to solve for cash. The value of Cori's Corporation's Current Assets is calculated to be $3,900.

Step-by-step explanation:

To determine the amount of cash Cori's Corporation has, we use the accounting equation: Assets = Liabilities + Equity. Since we know the book value of equity and that the only missing component is cash among the current assets, we can rearrange the equation to solve for cash:

Assets = Fixed Assets + Net Working Capital + Cash
Liabilities + Equity = Long-term Debt + Book Value of Equity

We are given that Fixed Assets are $19,470, Net Working Capital is $2,140, Long-term Debt is $8,150, and Book Value of Equity is $14,130. Net Working Capital other than cash consists of current assets minus current liabilities, so to find the value of Current Assets, we add back the Current Liabilities:

Current Assets = Net Working Capital + Current Liabilities = $2,140 + $1,760 = $3,900

Calculation:

Total Assets = Fixed Assets + Current Assets (including cash)
Total Assets = $19,470 + $3,900 = $23,370

Total Liabilities and Equity = Long-term Debt + Equity
Total Liabilities and Equity = $8,150 + $14,130 = $22,280

To find the cash, we subtract Total Liabilities and Equity from Total Assets:

Cash = Total Assets - Total Liabilities and Equity
Cash = $23,370 - $22,280 = $1,090

User Ryuichiro
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