Adobe Connect Enterprises prepared its financial statements for 2014 based on th

Question

Adobe Connect Enterprises prepared its financial statements for 2014 based on the information below. The company had cash of $1,350, inventory of $12,480, and accounts receivables

                  of $6,589. The company’s net fixed assets are $40,331, and other assets are $1,822.

                  It has accounts payable of $10,604, notes payable of $2,886, common stock of $22,400,

                  and retained earnings of $14,368. How much long-term debt does the firm have?

a.

$16,685

b.

$18,334

c.

$12,314

d.

$22,342

a.

$16,685

b.

$18,334

c.

$12,314

d.

$22,342

Explanation / Answer

Calculation of total long term debts

Total Assets = Total Liabilities

Current Assets + Non current assets = Owner Capital + Long term debt + Current liabilities

( 1350+12480+6589+1822) +40331 = ( 22400+14368) + Long Term Debt + ( 10604+2886)

62572 = 36768 + Long term debt + 13490

62572 = 50258 + Long term debt

Long term debt = 62572-50258 i.e 12314

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