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A retail giant, ABC Retailers, is facing economic uncertainty due to a recent downturn in...

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Accounting

A retail giant, ABC Retailers, is facing economic uncertainty due to a recent downturn in consumer spending. Evaluate the financial data provided below to determine whether ABC Retailers is likely to continue as a going concern.

Financial Data:

  • Total assets: $80,000,000
  • Total liabilities: $60,000,000
  • Total equity: $20,000,000
  • Net income for the year: $3,500,000
  • Cash and cash equivalents: $8,000,000
  • Accounts receivable: $12,000,000
  • Inventory: $25,000,000
  • Property, plant, and equipment: $35,000,000
  • Long-term debt: $30,000,000
  • Accounts payable: $15,000,000
  • Accrued expenses: $5,000,000
  • Revenue for the year: $90,000,000
  • Cost of goods sold: $40,000,000
  • Operating expenses: $25,000,000
Income tax expense: $4,500,000

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