Question

Wims, Inc., has current assets of $4,000, net fixed assets of $23,100, current liabilities of $2,500, and long-term debt of $12,400. 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 intermediate calculations.)

Answer 1

(a)- Value of the Shareholders’ Equity

Total Assets = Current Assets + Net Fixed Assets

= $4,000 + $23,100

= $27,100

Total Liabilities = Current Liabilities + Long-term Debt

= $2,500 + $12,400

= $14,900

Therefore, The Shareholders’ Equity = Total Assets – Total Liabilities

= $27,100 - $14,900

= $12,200

“The Value of the Shareholders’ Equity for this firm = $12,200”

(b)-Net Working Capital

Net Working Capital = Total Current Assets – Total Current Liabilities

= $4,000 - $2,500

= $1,500

“Net Working Capital = $1,500”