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  • Ex3.1 - Leacture 3

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    Dương Vũ
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    The document outlines the balance sheet of a company with $2 million in net plant and equipment, $0.15 million in notes payable, $0.75 million in long term debt, $1.5 million in common equity, and $0.1 million in accounts payable and accruals, for total assets of $2.5 million. It then calculates total debt as $0.9 million, total liabilities as $1 million, and total equity as $1.5 million. Current assets are calculated as $0.5 million and current liabilities as $0.25 million, resulting in net working capital of $0.25 million and net operating working capital of $0.4 million

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    Ex3.1_Leacture 3

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    The document outlines the balance sheet of a company with $2 million in net plant and equipment, $0.15 million in notes payable, $0.75 million in long term debt, $1.5 million in common equity, and $0.1 million in accounts payable and accruals, for total assets of $2.5 million. It then calculates total debt as $0.9 million, total liabilities as $1 million, and total equity as $1.5 million. Current assets are calculated as $0.5 million and current liabilities as $0.25 million, resulting in net working capital of $0.25 million and net operating working capital of $0.4 million

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    6 views1 page

    Ex3.1 - Leacture 3

    Uploaded by

    Dương Vũ
    The document outlines the balance sheet of a company with $2 million in net plant and equipment, $0.15 million in notes payable, $0.75 million in long term debt, $1.5 million in common equity, and $0.1 million in accounts payable and accruals, for total assets of $2.5 million. It then calculates total debt as $0.9 million, total liabilities as $1 million, and total equity as $1.5 million. Current assets are calculated as $0.5 million and current liabilities as $0.25 million, resulting in net working capital of $0.25 million and net operating working capital of $0.4 million

    Copyright:

    © All Rights Reserved
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    of 1

    3.

    Net plant & equipment $2 million

    Note payable $0.15 million


    Long term debt $0.75 million
    Common equity $1.5 million
    Accounts payable and accruals $0.1 million (balancing figure)
    Total assets $2.5 million

    a, Company’s total debt: Long term debt + Notes payable


    = $0.75 million + $0.15 million = $0.9 million

    b, Total liabilities + total equity = Total assets


    = $2.5 million
     Total libilities = Notes payable + long term debt + accounts payable & accruals
    = $0.15million + $0.75 million + $0.1 million =$ 1 million
     Total equity = Total assets – total liabilities
    = $2.5 million - $1 million = $1.5 million

    c, Current assets= Total assets – Net plant


    = $2.5 million – $2 million = $0.5 million

    d, Current liabilities = Notes payable + Accounts payable & accruals


    = $0,15 million + $0,1 million = $0,25 million

    e, Accounts payable & accruals = Balancing figure = $0,1 million

    f, Net working capital = Current assets – current liabilities


    = $0.5 million – $0.25 million = $0.25 million

    g, Net operating working capital = Current assets – (current liabilities -Notes payable)
    = $0.5 million – ($0.25 million – $0.1 million) = $0.4 million

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