Sunny Disposition, Inc.has net working capital of $32,500, current assets of $59,000, equity of $74,500, and long-term debt of $42,500.What is the amount of the net fixed assets?
A)$58,000
B)$111,000
C)$94,600
D)$63,900
E)$84,500

Question

Quizplus · Accepted Answer

Net fixed assets can be calculated using the balance sheet equation: Total Assets = Total Liabilities + Equity. First, calculate current liabilities: Current Liabilities = Current Assets - Net Working Capital = $59,000 - $32,500 = $26,500. Then, Total Liabilities = Current Liabilities + Long-term Debt = $26,500 + $42,500 = $69,000. Total Assets = Total Liabilities + Equity = $69,000 + $74,500 = $143,500. Finally, Net Fixed Assets = Total Assets - Current Assets = $143,500 - $59,000 = $84,500.