What is the tangible net worth of Widgets, Inc. if it has the following balance sheet...

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

Solutions

Expert Solution

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

jeff jeffy answered 1 year ago

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