Granger Inc.has done a long-term forecast of its balance sheet.Total assets are projected to be $800,000 and other long-term liabilities are $300,000.If the firm expects to need $150,000 in net new financing,what are the projected current liabilities?
A)$650,000
B)$150,000
C)$350,000
D)$450,000
E)$250,000

Question

Quizplus · Accepted Answer

Projected current liabilities can be calculated as:
(Current assets + Net new financing) - (Long-term liabilities + Equity)
= (800,000 - Other long-term liabilities + 150,000) - (300,000 + Equity)
Assuming Equity is equal to $350,000 (the difference between total assets and all liabilities), we get:
= ($650,000) - ($350,000)
= $300,000
Therefore, the projected current liabilities are $350,000. The correct answer is C.