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6 February, 15:29

Global Exporters has total assets of $84,300, net working capital of $22,900, owner's equity of $38,600, and long-term debt of $23,900. What is the value of the current assets?

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  1. 6 February, 17:30
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    The value of current assets is $44700.

    Explanation:

    The basic accounting equation establishes the relationship between assets, liabilities and equity. The equation states that:

    Assets = Liabilities + Equity

    84300 = (Current Liabilities + Long term Liabilities) + 38600

    84300 = Current Liabilities + 23900 + 38600

    84300 = Current Liabilities + 62500

    84300 - 62500 = Current Liabilities

    Current Liabilities = $21800

    The liabilities are made up of both current and long term liabilities.

    The working capital is the difference between the current assets and the current liabilities.

    Working capital = Current assets - Current liabilities

    22900 = Current assets - 21800

    Current assets = 22900 + 21800

    Current assets = $44700
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