University of Wisconsin, Green BayBUS ADM 343-004 

Saunders Corp. has a book net worth of $5,600. Long-term debt is $1,150. Net working capital, other than cash, is $1,450. Fixed assets are $1,400 and current liabilities are $750.

Required:(a)How much cash does the company have? 

4,650

5,350

4,200

4,790

4,510

(b)What is the value of the current assets? 

6,850

2,200

6,713

7,192

6,508

 

Answer:

a. Cash = 4,650

b. current assets = 6,850

Step-by-step explanation

1.

Given;

book net worth = $5,600

 Long-term debt = $1,150

Net working capital, other than cash = $1,450

Fixed assets = $1,400

current liabilities = $750

Total liabilities = net book worth + current liabilities + long-term debt

                         = $5,600 + 750 + $1,150

                         = $7,500

Total assets = Total liabilities = $7,500

Total assets  = Fixed assets + Net working capital + cash

$7,500 = $1,400 +  $1,450 + cash

Cash = $7,500 - $1,400 - $1,450

          = $4650

cash = $4,650

b. value of the current assets;

Net working capital + cash = current assets - current liabilities

$1450 + $4650 = current assets - $750

 current assets = $1450 + $4650 + $750

                           = 6,850

current asset = $6,850