Question

1. A company has $1,301 in inventory, $4,728 in net fixed assets, $598 in accounts receivable, $254 in cash, $538 in accounts payable, and $5,323 in equity. What is the company's long-term debt?

2. You find the following financial information about a company: net working capital = $1,113; fixed assets = $6,281; total assets = $8,638; and long-term debt = $4,645. What are the company's total liabilities?

14. (3)

The tax rates are as shown below:

Taxable Income	Tax Rate
$0 – 50,000	15	%
50,001 – 75,000	25	%
75,001 – 100,000	34	%
100,001 – 335,000	39	%

Your firm currently has taxable income of $80,800. How much additional tax will you owe if you increase your taxable income by $22,000?

Which one of the following statements is correct?

Multiple Choice

• A general partnership is legally the same as a corporation.

• Income from both sole proprietorships and partnerships that is taxable is treated as individual income.

• Partnerships are the most complicated type of business to form.

• All business organizations have bylaws.

• Only firms organized as sole proprietorships have limited lives.

Answer 1

Answer to Question 1.
Total Current Assets = Cash + Accounts Receivable + Inventory
Total Current Assets = $254 + $598 + $1,301
Total Current Assets = $2,153

Total Assets = Total Current Assets + Net Fixed Assets
Total Assets = $2,153 + $4,728
Total Assets = $6,881

Total Assets = Total Liabilities and Equity
Total Liabilities and Equity = $6,881

Current Liabilities = Accounts Payable
Current Liabilities = $538

Total Liabilities and Equity = Current Liabilities + Long term debt + Equity
$6,881 = $538 + Long Term debt + $5,323
Long Term debt = $1,020

Answer to Question 2.
Total Assets = Total Current Assets + Net Fixed Assets
$8,638 = Total Current Assets + $6,281
Total Current Assets = $2,357

Net Working Capital = Total Current Assets – Total Current Liabilities
$1,113 = $2,357 - Total Current Liabilities
Total Current Liabilities = $1,244

Total Liabilities = Total Current Liabilities + Long Term Debt
Total Liabilities = $1,244 + $4,645
Total Liabilities = $5,889