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?

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Answer #1

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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