Question

(Working with the balance​ sheet)  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 $ 50 comma 000​, net fixed assets of $ 250 comma 000​, current liabilities of $ 30 comma 000​, and​ long-term debt of $ 100 comma 000. a.  Calculate​ Caraway's stockholders' equity. b. What is the​ firm's net working​ capital? c.  If​ Caraway's current liabilities consist of $ 20 comma 000 in accounts payable and $ 10 comma 000 in​ short-term debt​ (notes payable), what is the​ firm's net working​ capital?

Answer 1

Answer a = Shareholders equity = $170000

Reason = shareholders equity = fixed assets + current assets - curecur liabilities - long term debts.

= (250,000+50,000)-(30,000+100,000)

= 170000

Answer b = $20000

Reason - net working capital = current asset - current liabilitie

= 50000 - 30000

= 20000

Answer c = $20000

Reason - net working capital = current assets - ( accounts payable + notes payable )

= 50000 - (20000 + 10000)

= 20000

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