Kroeger, Inc., has current assets of $2,270, net fixed assets of $10,300, current liabilities of $1,400, and long-term debt of $4,080. (Enter your answer as directed, but do not round intermediate calculations.) Requirement 1: What is the value of the shareholders’ equity account for this firm? Shareholder's equity $ Requirement 2: How much is net working capital? Net working capital $ Explanation: The balance sheet for the company will look like this: Balance sheet Current assets $ 2,270 Current liabilities $ 1,400 Net fixed assets 10,300 Long-term debt 4,080 Owner's equity 7,090 Total assets $ 12,570 Total liabilities and owners' equity $ 12,570 The owners’ equity is a plug variable. We know that total assets must equal total liabilities and owners’ equity. Total liabilities and owners’ equity is the sum of all debt and equity, so if we subtract debt from total liabilities and owners’ equity, the remainder must be the equity balance, so: Owners' equity = Total liabilities and owners' equity – Current liabilities – Long-term debt Owners' equity = $12,570 – 1,400 – 4,080 Owner's equity = $7,090 Net working capital is current assets minus current liabilities, so: NWC = Current assets – Current liabilities NWC = $2,270 – 1,400 NWC = $870

Kroeger, Inc., has current assets of $2,270, net fixed assets of $10,300, current liabilities of $1,400, and long-term debt of $4,080. (Enter your answer as directed, but do not round intermediate calculations.)

Requirement 1:

What is the value of the shareholders’ equity account for this firm?

Shareholder's equity

$

Requirement 2:

How much is net working capital?

Net working capital

$

Explanation:

The balance sheet for the company will look like this:

Balance sheet
Current assets	$	2,270	Current liabilities	$	1,400
Net fixed assets		10,300	Long-term debt		4,080
			Owner's equity		7,090
Total assets	$	12,570	Total liabilities and owners' equity	$	12,570

The owners’ equity is a plug variable. We know that total assets must equal total liabilities and owners’ equity. Total liabilities and owners’ equity is the sum of all debt and equity, so if we subtract debt from total liabilities and owners’ equity, the remainder must be the equity balance, so:

Owners' equity = Total liabilities and owners' equity – Current liabilities – Long-term debt

Owners' equity = $12,570 – 1,400 – 4,080

Owner's equity = $7,090

Net working capital is current assets minus current liabilities, so:

NWC = Current assets – Current liabilities

NWC = $2,270 – 1,400

NWC = $870