On december 31 2015 company A report total assets of 450000

On december 31, 2015. company A report total assets of $ 4500,000 and total equity of $ 2,345,000. all liabilities are current ( the company has no long term debt). the company has a current ration of 0.7. how much are current assets?

Solution

a. As per Balance sheet Equation, Total Liabilities = Total Assets - Equity = $       45,00,000 - $ 23,45,000 = $       21,55,000 b. All liabilities are current liabiities. So, Current liabilities $       21,55,000 c. Current Ratio = Current Asset / Current Liabiities or, 0.7 = Current Asset / 2155000 or, Current Assets = $       15,08,500 Thus, Current Assets $ 15,08,500