Question

KCCO, Inc., has current assets of $4,200, net fixed assets of $23,400, current liabilities of $3,750, and long-term debt of $8,400.

1. What is the value of the shareholders’ equity account for this firm? (Do not round intermediate calculations.)
2. How much is net working capital? (Do not round intermediate calculations.)

Answer 1

See below

Step-by-step explanation:

1. Value of shareholder's equity is computed as

= Total assets - Current liabilities - long term debt

= [($4,200 + $24,400) - $3,750 - $8,400]

= $28,600 - $3,750 - $8,400

= $16,450

2. How much is net working capital

This is computed as;

= Total current asset - Total current liabilities

= $4,200 - $3,750

= $450