Kings of Leon, Inc., has a book value of equity of $64,500. Long-term

QUESTION

Kings of Leon, Inc., has a book value of equity of $64,500. Long-term
debt is $57,500. Net working capital, other than cash, is $22,300. Fixed
assets are $92,100 and current liabilities are $7,300.

How much cash does the company have and what is the amount of current
assets?
Solution: Kings of Leon Inc. Net working capital = Current Assets Current liabilities $22,300 = Current assets $7,300 Current Assets = $29,600 Calculation of cash balance We know that as per the accounting equation: Assets = Liabilities +

Equity Net fixed assets + current assets = current liabilities + long-term liabilities + equity $92,100 + 29,600 + cash = $7,300 + 57,500 + 64,500 Cash = $7,600

ANSWER:

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