Question

Tim Dye, the CFO of Blackwell Automotive, Inc., is putting together this year's financial statements. He has gathered the following balance sheet information: The firm had a cash balance of $23,015, accounts payable of $163,257, common stock of $312,000, retained earnings of $512,159, inventory of $210,800, goodwill and other assets equal to $78,656, net plant and equipment of $715,000, and short-term notes payable of $21,115. It also had accounts receivable of $141,258 and other current assets of $11,223. How much long-term debt does Blackwell Automotive have? Long-term debt

Answer 1

Calculating Long-term debt by preparing Pro-forma Balance Sheet:-

Assets	Amount ($)
Cash	23,015.00
Accounts receivables	141,258.00
Inventory	210,800.00
Other Current Assets	11,223.00
Current Assets	386,296.00
Net Plant & Equipment	715,000.00
Goodwill and Other assets	78,656.00
Total Assets	1,179,952.00
Liabilities and Equity
Accounts payable	163,257.00
Short-term Notes Payable	21,115.00
Total Current laibilities	184,372.00
Long-term Debt (Balancing figure)	171,421.00
Total Liabilities	355,793.00
Common Stock	312,000.00
Accumulated Retained earnings	512,159.00
Total Shareholder's Equity	824,159.00
Total Liabilities and Equity	1,179,952.00

Note- Long- Term Debt = Total Assets - Current Liabilities - Total shareholders equity

So, Longterm debt is $171,421