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(1) Company's Total Debt Balance = $900,000
(2) Total Liabilities & Equity Balance =$2,500,000
(3) Current Assets Balance =$500,000
(4)Current Liabilities Balance =$250,000
(5)Account payable & accruals balance =$100,000
(6)Firm's Net working Capital =$250,000
(7)Firm's Net Operating Working Capital =$400,000
(8) Difference =$150,000
(1) Total debt =Long-term debt+Notes payable
(2)Total liabilities & equity balance = 2,500,000. This is so because total assets are being financed by total liabilities and equity.
Hence, total assets = total equity+total liabilities
(3)Value of the firm's total assets =Net Plant equipment +current Assets
Hence, CA =$500,000.
(4) Current Liabilities(CL) Balance = Value of notes payable+Account payable(AP) & accruals
Current liabilities(CL) Balance = $150,000+$100,000
Hence, CL Balance =$250,000.
(5) Total Assets =Long-term debt+B=Notes payable+Account payable & accruals(Total Liabilities) +Equity
2,500,000= 750,000+150,000+AP & Accruals +1,500,000
AP & Accruals = $100,000.
(6) Firm's Net working Capital ( FNWC) = CA-CL
Hence, FNWC =$250,000
(7)Firm's Net Operating Working Capital (FNOWC)=Current Operating Assets-Current Operating Liabilities.
Hence, FNOWC = 500,000-100,000
(8) When calculating Net Operating working capital, it is only operating liabilities that are deducted from CA. Operating liabilities means non-interest current liabilities used primarily to carry out business operation and payable within next one year.
Hence, notes payable is added to CL when calculating net working capital but omitted from CL when calculating net operating working capital.