Question

The assets of Stewart company consist entirely of current assets and net plant and equipment. The firm has total assets of $3.6 million and net plant and equipment equals $1.2 million. It has notes payable of $570,000, long-term debt of $1.15 million, and total common equity of $1.25 million. The firm does have accounts payable and accruals on its balance sheet. The firm only finances with debt and common equity, so it has no preferred stock on its balance sheet. cantinn 29.12.21 nointe) Saved

Answer 1

Long-term Debts = $ 1.15 million

Notes Payable = $ 570,000

Total Common Equity = $ 1.25 million

Total Assets = $ 3.6 million

As firm does not have Accounts payable and Accurals on its balance sheet, and finances with only Debt and Common Equity and has no preference stock.

Total Assets = Notes Payable + Long-term Debts + Other Debts + Total Common Equity

$ 3.6 million = $ 570,000 + $ 1.15 million + Other Debts + $ 1.25 million

Other Debts = $630,000

Total Debts = Long-term Debts + Notes Payable + Other Debts

= $ 1.15 million + $ 570,000 + $630,000

= $ 2,350,000

Hence, Option C