Question 4 The assets of Happy Travel Limited (“HTL”) consist entirely of current assets and net furniture and equipment. HTL has total assets of $5,000,000 and net furniture and equipment equals $4,000,000. HTL has current liabilities of notes payable of $300,000, accounts payable $150,000 and accruals. HTL has long term debt of $1,500,000. HTL has common equity of $3,000,000. HTL only finances with debt and common equity, so it has no preferred stock. Required: (a) How much is HTL's total debt? (2 marks) (b) What is the amount of total liabilities and equity on HTL's balance sheet? (2 marks) (c) What is the amount of current assets on HTL's balance sheet? (2 marks) (d) What is the amount of current liabilities on HTL's balance sheet? (2 marks) (e) What is the amount of accruals on HTL's balance sheet? (3 marks) (f) How much is HTL's net working capital? (3 marks) (g) How much is HTL's net operating capital? (3 marks) (h) Explain the difference in your answers to part (f) and (g), if any. (3 marks)

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