In: Finance
What is the tangible net worth of Widgets, Inc. if it has the following balance sheet totals at December 31, 20X3: total current assets of $30,000; total fixed assets of $65,000; goodwill and patents of $5,000; and total liabilities of $45,000? 20X3
Select one:
a. $25,000
b. $50,000
c. $55,000
d. $100,000
What is the tangible net worth of Widgets, Inc.
Answer: $50,000
Workings
Formula for calculating tangible net worth is as follows;
Tangible net worth = Total Assets – total liabilities – Intangible assets
Total Assets = total current assets + total fixed assets + Intangible assets
=$30,000 + $65,000 + $5000
=$100,000
Calculation of tangible net worth
Tangible net worth = Total Assets – total liabilities – Intangible assets
= $100,000 - $45,000 - $5000
= $50,000
Note:
Information provided in the question
Total current assets = $30,000
Total fixed assets = $65,000
Intangible assets = Goodwill and patents = $5,000
Total liabilities = $45,000