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4 July, 13:31

Bear Tracks, Inc., has current assets of $2,250, net fixed assets of $10,100, current liabilities of $1,390, and long-term debt of $4,060. What is the value of the shareholders' equity account for this firm? How much is the company's net working capital?

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  1. 4 July, 13:39
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    The shareholders' equity account for this firm is $6,900.

    The company's net working capital is $860

    Explanation:

    The accounting equation shows the relationship between the various elements of the balance sheet. These are the assets, liabilities and equity. the equation is given as

    Assets = Liabilities + Equity

    where assets and liabilities are the totals of the current and non current.

    Working capital is the difference between a company's current asset and its current liabilities.

    Given,

    current assets = $2,250,

    net fixed assets = $10,100,

    current liabilities = $1,390, and

    long-term debt = $4,060

    The shareholders' equity account for this firm

    = $2,250 + $10,100 - $1,390 - $4,060

    = $6,900

    The company's net working capital

    = $2,250 - $1,390

    = $860
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