Answer:
Current Assets = $2,210,000
Shareholders Equity = $1,000,000
Non-Current Assets = $690,000
Long-term Liabilities = $1,050,000
Explanation:
Current Assets
Current Ratio is Current Assets divided by Current Liabilities.
Acid Test Ratio is Current assets less inventory divided by Current Liabilities.
Equating the two we have,
Current Assets / Liabilities - (Current Assets - Inventory) / Current Liabilities = 2.60 - 1.60
(Current Assets - Current Assets - 850,000 ) / Current Liabilities = 1
850,000/Current Liabilities = 1
Current Liabilities = $850,000
With Current Liability known, Current Assets can be calculated using the Current Ratio.
2.60 = Current Assets / Current Liabilities
2.60 = Current Assets / 850,000
Current Assets = $2,210,000
Shareholders Equity
Debt to Equity Ratio of 1.9 is given.
Formula for Debt to Equity ratio is,
= Total Liabilities / Shareholders Equity
Total Assets which is given can be calculated as,
Total Liabilities + Shareholders Equity = Total Assets
Total Liabilities + Shareholders Equity = 2,900,000
Denote Shareholders Equity as s,
Shareholders Equity being denominator means that it goes into Liabilities 1.9 times (Debt to Equity Ratio)
Therefore,
1.9s + s = 2,900,000
2.9s = 2,900,000
s = $1,000,000
Shareholders Equity = $1,000,000
Non-Current Assets
Non - Current Assets = Total Assets - Current Assets
= 2,900,000 - 2,210,000
= $690,000
Long-term Liabilities
Liabilities and Equity fund the company assets.
Total Assets = Shareholders Equity + Current Liabilities + Long-term Liabilities
Long Term Liabilities = Total Assets - Shareholders Equity - Current Liabilities
= 2,900,000 - 1,000,000 - 850,000
= $1,050,000
Long-term Liabilities = $1,050,000
