Bernard Auto has shareholders equity of $121,400. The firm owes a total of $132,000 of which 40% is payable within the next year. The firm has net fixed assets of $151,620. what is the amount of the net working capital? can you show the work

$48,580

Explanation:

Shareholder's equity is equal to total assets - total liabilities.

Bernard Auto has shareholder equity = $121,400

Liabilities are $132,000, of which 40% are current liabilities.

the net fixed assets are $151, 620.

Net working capital? net working capital = currents assets - current liabilities

Current liabilities =40% of 132,000

=40/100 x $132,000

=$52,800

To calculate total assets, we use a re -arranged formula of shareholders equity

$121,400 = total assets - 132,000

Total assets =$253,000

If fixed assets are $151, 620, currents assets will  be total assets -fixed assets

=$253,000 - 151,620 =$101,380

Net working capital: $101,380 - $52,800= $48, 580

Net working capital =$48,580