A Firm Reports the Following Balance Sheet Items: Total Current

question 60

Multiple Choice

A firm reports the following balance sheet items: total current liabilities of $535,000; total assets of $2,500,000; fixed and other assets of $1,850,000; and long-term debt of $200,000.What is the amount of the firm's net working capital?

• A)$115,000
• B)$450,000
• C)$335,000
• D)$1,315,000

Analyze the impact of bankruptcy on secured transactions.

Recognize the role of attachment and perfection timing in determining priority among conflicting security interests.

Comprehend how assignment of security interests affects the rights of the original secured party and assignee.

Appreciate the cumulative nature of rights and remedies under Article 9 of the UCC.

---

Definitions:

Net Assets

The difference between total assets and total liabilities on a company's balance sheet, representing the owner's equity.

Shareholders' Point of View

The perspective of the owners of equity in a company, focusing on returns on investment, risk management, and the strategic direction of the company.

Bargain Purchase

A scenario in which a company acquires another company for a price less than the fair market value of its net assets.

Equity Financing

Raising capital through the sale of shares in a company, resulting in new shareholders and diluting the ownership stake of existing shareholders.