Question

Arredondo, Inc. has current assets of $2,170, net fixed assets of $9,300, current liabilities of $1,350, and long-term debt of $3,980.

Required:
What is the value of the shareholders'equity account for this firm? How much is net working capital?

Answer 1

Answer:Shareholders' equity= $6,140

Net working capital= $820

Step-by-step explanation:

Shareholders' equity = Total Assets - Total Liabilities

But,

Total Assets = Current assets + net fixed assets

$2,170 + $9,300 =$11,470

Total liabilities =Current Liabilities + Long term debt

$1,350 +$3,980

=$5,330

Shareholders' equity =$11,470-$5,330 = $6,140

B) Net working capital is calculated as Current Asset - Current Liabilities

$2,170-$1,350

=$820