Question

Consider the balance sheet entries for War Eagle Corporation in the table below. What is the firm's total current assets? $ What is the total current liabilities? S What is the total working capital? S What is the shareholders' equity? $ Balance Sheet Statement as of December 31, 2009 Assets: Cash Marketable securities Accounts receivables Inventories Prepaid taxes and insurance Manufacturing plant at cost Less accumulated depreciation Net fixed assets Goodwill $ 153,654 $ 200,000 $ 150,000 $ 50.000 $ 30,000 $ 600,000 $ 100,000 $ 500.000 $ 20,000 Liabilities and shareholders' equity Notes payable Accounts payable Income taxes payable Long-term mortgage bonds Preferred stock, 6%, $100 par value (1000 shares) Common stock, $15 par value (10,000 shares) Capital surplus Retained eamings $ 50,000 $ 103.820 $ 80.000 $ 400,000 $ 100.000 $ 150,000 $ 150,000 $ 73,288

Answer 1

I). Firm's Total Current assets = Cash + Marketable Securities + Accounts Receivables + Inventories + Prepaid taxes and Insurance

= 153,654 + 200,000 + 150,000 + 50,000 + 30,000

Firm's Total Current assets = $ 583,654

ii). Firm's Total Current Liabilities = Notes Payable + Accounts Payable + Income Taxes Payable

= 50,000 + 103,820 + 80,000

Firm's Total Current Liabilities = $ 233,820

iii). Total Working Capital = Total Current assets - Total Current Liabilities

= $ 583,654 - 233,820

Total Working Capital = $ 349,834

iv). Shareholder's Equity = Preferred Stock + Common Stock + Capital Surplus + Retained earnings

= 100,000 + 150,000 + 150,000 + 73,288

Shareholder's Equity = $ 473,288

If you like my answer then please Up-vote as it will be motivating.