MBA 7200 homework.docx

# MBA 7200 homework.docx - KCCO Inc has current assets of...

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KCCO, Inc., has current assets of \$4,750, net fixed assets of \$23,900, current liabilities of \$3,000, and long-term debt of \$13,400. What is the value of the shareholders’ equity account for this firm? (Do not round intermediate calculations.) Shareholders' equity \$ How much is net working capital? (Do not round intermediate calculations.) Net working capital \$ Explanation: To find owners' equity, we must construct a balance sheet as follows: Balance Sheet C A \$ 4,750 C L \$ 3,000 N FA 23,900 LT D 13,400 O E ?? T A \$ 28,650 TL & O E \$ 28,650 We know that total liabilities and owners' equity (TL & OE) must equal total assets of \$28,650. We also know that TL & OE is equal to current liabilities plus long-term debt plus owners' equity, so owners' equity is: OE = \$28,650 – 13,400 – 3,000 = \$12,250 And net working capital (NWC) is: NWC = CA – CL = \$4,750 – 3,000 = \$1,750 Billy’s Exterminators, Inc., has sales of \$655,000, costs of \$304,000, depreciation expense of \$56,000, interest expense of \$38,000, and a tax rate of 35 percent. What is the net income for this firm? (Do not round intermediate calculations.) 12,250 ± 0.1% 1,750 ± 1%

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Net income \$ Explanation:
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