Answer:
Explanation:
1.Total Debt = Total Assets – Total Equity = 2,700,000 – 1,550,000
= $1,150,000
2.Total assets = Total liabilities +Total equity = $2,700,000
3.Current Assets = Total Assets – Plant and Equipment = 2,700,000-2,300,000 = 400,000
4.Current Liabilities = Total Liabilities – Long term debt = 1,150,000 – 748,000 = $402000
5.Accounts payables and accruals = current liabilities – notes payables
= 402000 – 150,000 = $252000
6.Working capital = Current Assets – Current Liabilities = 400,000-402,000
= -2000
7.Net operating working capital = Current assets – Accounts payables and accruals = 400,000 – 252,000 = 148,000
8.Difference = -2,000-148,000 = -150,000 (indicates note payable)
Recalculation with new information:
1.Total Debt = Total Assets – Total Equity = 4,000,000 – 2,000,000 -500,000 =
= $1,500,000
2.Total assets = Total liabilities +Total equity = $4,000,000
3.Current Assets = Total Assets – Plant and Equipment = 4,000,000-3,000,000 = $1,000,000
4.Current Liabilities = Total Liabilities – Long term debt = 1,500,000 – 950,000 = $550000
5.Accounts payables and accruals = current liabilities – notes payables
= 550,000 – 150,000 = $400,000
