Question

# Sam's Corporation has equity value of \$14,480. The long term debt is \$9,970. Net working capital...

Sam's Corporation has equity value of \$14,480. The long term debt is \$9,970. Net working capital other then cash is \$3,340. Fixed assets are \$12,840.

A. How much cash does the company have? If current liabilities are \$4,980.

B. What is the total current assets?

Ans:

Given data,

Current assets other than cash - Current liabilities = Net workign capital other than cash = \$ 3,340.

Fixed assets = \$ 12,840

Equity = \$ 14,480

Long term debt = \$ 9,970.

A. Formula , Total assets = Total liabilities

Cash + Current assets other than cash + Fixed assets = Current liabitlities + LOng term debt + Equity

Cash + Current assets other than cash - Current liabilities + Fixed assets = Long term debt + Equity

Cash + Net working capital other than cash + Fixed assets = Long term debt + Equity value

Cash + \$ 3,340 + \$ 12,840 = \$ 9,970 + \$ 14,480.

Cash = \$ 9,970 + \$ 14,480 - \$ 12,840 - \$ 3,340.

Cash = \$ 8,270.

B. Cash + Net working capital other than cash = \$ 8,270 + \$ 3,340

Current assets - Current liabilityies = \$ 8270 + \$ 3340

Current assets = \$ 8270 + \$ 3340 -\$ 4980

Current assets = \$ 6,630.

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