The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heir

Question

The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants are preferred by many growers for their superior flavor. At the end of the most recent year the firm had current assets of $49,300, net fixed assets pf $251,600, current liabilities of $28,900 and long-term debt of $100,200.

a) Calculate Caraway's Stockholder equity (rounded to the nearest dollar)
b) What is the firm's net working capital?
c) If Caraway's current liabilities consist of $19,500 in accounts payable and $9,400 in short tem debt (notes payable), what is the firms net working capital?

Explanation / Answer

1.

Stock holders’ equity = Total asset – Total debt

                                       = (49300 + 251600) – (28900 + 100200)

                                      = 300900 – 129100

                                       = $171800

2.

Net working capital = Current asset – Current liability

                                    = 49300 – 28900

                                     = $20400

3.

Now the net working capital will be = 49300 – 19500

                                                                = $29800

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