Question

1. The following amounts were taken from a company's balance sheet: Total assets, $100,000 Total liabilities,...

1. The following amounts were taken from a company's balance sheet:

Total assets, $100,000

Total liabilities, $20,000

Total stockholders' equity, $80,000

Current assets, $10,000

Current liabilities, $5,000

The company's working capital is

$5,000.

$80,000.

$10,000.

$20,000.

2. The following amounts were taken from a company's balance sheet:

Total assets, $100,000

Total liabilities, $20,000

Total stockholders' equity, $80,000

Current assets, $10,000

Current liabilities, $5,000

The company's current ratio is

0.50.

5.0.

2.0.

None of these choices are correct.

Business   Accounting   
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Homework Answers

Answer #1

1. Working capital = Current assets-current liabilities

                             = 10000-5000

Working capital = 5000

so answer is a) 5000

2. Current ratio = Current assets/current liabilties

                      = 10000/5000

Current ratio = 2.0

so answer is c) 2.0

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