Question

The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants are preferred by many growers for their superior flavor. At the end of the most recent year the firm had current assets of $49,700​, net fixed assets of $248,300​, current liabilities of $28,400​, and​ long-term debt of $101,600.
A. Calculate Caraway's stockholders' equity.B. What is the firm's net working capital?

Answer 1

Answer:

A.

$168,000

B.

$21,300

Explanation:

A.

As per accounting equation

Assets = Liabilities + Equity

Equity = Assets - Liabilities

Placing values in the equation

Equity = ( Current assets + Net Fixed Assets ) - ( Current Liabilities + Long term debt )

Equity = ( $49,700 + 248,300 ) - ( 28,400 + 101,600)

Equity = $168,000

B.

Net Working capital is the net of current assets and current liabilities of the company.

Use following formula of net working capital

Net working capital = Current assets - current liabilities

Net working capital = $49,700 - 28,400

Net working capital = $21,300