Explanation:
a. Current assets = $600000
Current ratio = 3
Current ratio = Current assets ÷Current liabilities = 3
⇒Current assets = 3 Current liabilities
Given that
Quick ratio = 2.25
Also we know that
Quick assets = Quick assets / Current liabilities = 2.25
therefore, Quick assets = 2.25 Current liabilities
Also, Quick assets = Current assets - Inventory
then,
2.25 current liabilities = 3 Current liabilities - $150000
⇒$150000 = 0.75 Current liabilities
Hence, Current liabilities = $200000
Current assets = 3 Current liabilities
= 3 × $200000
= $600000.
b. Calculating for Shareholders equity we get
Shareholders equity = $560000
We know that ,
Total debt + Total equity = Total assets
Debt to equity ratio = 1.5
Also, Total debt / Shareholders equity = 1.5
Debt = 1.5 Shareholders equity
1.5 Shareholders equity + 1 Equity = $1400000
2.5 Shareholders equity = $1400000
Shareholders equity = $560000.
Now calculating for Non current assests
c. Non Current assets = $800000
Total assets = Current assets + Non current assets
$1400000 = $600000 + Non current assets
Non current assets = $800000.
d. Long term liabilities = $640000.
Total assets = Total liabilities + Shareholders equity
$1400000 = Current liabilities + Long term liabilities + Shareholders equity
$1400000 = $200000 + Long term liabilities + $560000
Long term liabilities = $640000.
