Riccarton Ltd has non-current assets of £9,000, non-current liabilities of £5,000, current liabilities of £2,000 and equity of £5,000. Riccarton Ltd’s current assets are: a) None of the above b) £3,000 c) £4,000 d) £2,000

Riccarton Ltd has non-current assets of £9,000, non-current liabilities of £5,000, current liabilities of £2,000 and equity of £5,000. Riccarton Ltd’s current assets are: a) None of the above b) £3,000 c) £4,000 d) £2,000

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter24: Bankruptcy, Reorganization, And Liquidation

Section: Chapter Questions

Problem 1P: Southwestern Wear Inc. has the following balance sheet: The trustees costs total 281,250, and the...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Riccarton Ltd has non-current assets of £9,000, non-current liabilities of £5,000, current liabilities of £2,000 and equity of £5,000.

Riccarton Ltd’s current assets are:

a) None of the above

b) £3,000

c) £4,000

d) £2,000

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