Cash equation. Sunset, inc., has a book value of equity of $13,205. Long-term de

Question

Cash equation. Sunset, inc., has a book value of equity of $13,205. Long-term debt is $8,200. Net working capital, other than cash, is $2,205. Fixed assets are $18,380. How much cash does the company have? If current liabilities are $1,630, what are current assets?
Cash equation. Sunset, inc., has a book value of equity of $13,205. Long-term debt is $8,200. Net working capital, other than cash, is $2,205. Fixed assets are $18,380. How much cash does the company have? If current liabilities are $1,630, what are current assets?

Explanation / Answer

Equity + long term Debt = net working capital + fixed assets+ cash

13205+8200 = 2205+18380+ cash

21405 = 20585+ cash

Cash = 21405-20585 = 820

Net working capital = Current Assets - current liabilities

2205 = current Assets - 1630

current Assets = 2205 +1603 = 3808

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