Question

In: Finance

Chang and Smith Tours has the following balance sheets: 20182019 Assets Cash $190 $190 Accounts...

Chang and Smith Tours has the following balance sheets: 2018 2019 Assets Cash $190 $190 Accounts Receivable 684 726 Inventory 918 1,023 Net Fixed Assets 2,027 1,996 Total Assets $3,819 $3,935 Liabilities and Equity Accounts Payable $788 $818 Notes Payable 306 302 Long-Term Debt 1,647 1,722 Stockholders' Equity 1,078 1,093 Total Liabilities and Equity $3,819 $3,935 What is the change in net working capital during the year 2019? Group of answer choices

$90

$46

$175

$121

Solutions

Expert Solution

1. net working capital 2019 = Current assets - Current Liabilities

net working capital 2019 = cash + accounts receivable + inventory - accounts payable - notes payable

net working capital 2019 = 190 + 726 + 1023 - 818 - 302

net working capital 2019 = 819

2. net working capital 2018 = Current assets - Current Liabilities

net working capital 2018 = cash + accounts receivable + inventory - accounts payable - notes payable

net working capital 2018 = 190 +684 + 918 - 788 - 306

net working capital 2018 = 698

3. Change in Net working capital = Net working capital 2019 - Net working capital 2018

Change in Net working capital = 819 - 698

Change in Net working capital = $121 Option D


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