Question
In: Finance
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
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