Mylex has current assets of $95, net fixed assets of $250, long-term debt of $40, and owners' equity of $200, what is the value of current liabilities if that is the only other item on the statement of financial position?

Question

Quizplus · Accepted Answer

The value of current liabilities can be calculated using the accounting equation: Assets = Liabilities + Owners' Equity. Here, total assets = current assets + net fixed assets = $95 + $250 = $345. Given that owners' equity is $200 and long-term debt is $40, the total liabilities and owners' equity = $40 (long-term debt) + $200 (owners' equity) = $240. To make the equation balance, current liabilities must be $345 (total assets) - $240 (total liabilities and owners' equity) = $105.

Mylex Has Current Assets of $95, Net Fixed Assets of $250