Question

A company has $1,273 in inventory, $4,692 in net fixed assets, $574 in accounts receivable, $238...

A company has $1,273 in inventory, $4,692 in net fixed assets, $574 in accounts receivable, $238 in cash, $506 in accounts payable, and $5,287 in equity. What is the company's long-term debt?

Multiple Choice

  • $984

  • $1,163

  • $1,490

  • $1,021

  • $1,422

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Answer #1

Interpretation:

Balance sheet
Equity and Liabilities Amt $ Assets Amt $
Net assets 4692
Equity 5287
Current assets:
1.Inventories 1273
A/c Payable 506 2.A/C receivables 574
Long Term Debt (Missing ) 984 3. Cash 238
Total Equity and liabilities 6777 Total Assets 6777

Correct option is $984.

Long term Debt = Total Assets - Equity - A/c Payable ( as balance sheet both sides will always be same)

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