Tumbling Haven, a gymnastic equipment manufacturer, provided the following information to its accountants. The company had current assets of $145,332, net fixed assets of $356,190, and other assets of $4,176. The company has long-term debt of $76,445, ordinary share capital of $200,000, and retained earnings of $134,461. What amount of current liabilities does this company have?

Question

Quizplus · Accepted Answer

We can use the accounting equation to solve for the current liabilities:

Assets = Liabilities + Shareholders' Equity

Substituting the values given, we have:

$505,698 ($145,332 + $356,190 + $4,176) = Liabilities + $334,461 ($200,000 + $134,461)

Liabilities = $505,698 - $334,461

Liabilities = $171,237

However, the question asks only for the amount of current liabilities, which excludes any long-term debt. So we need to subtract the long-term debt:

Current Liabilities = $171,237 - $76,445

Current Liabilities = $94,792

Therefore, the answer is A) $94,792.

Tumbling Haven, a Gymnastic Equipment Manufacturer, Provided the Following Information