Question

The following data are taken from the balance sheet at the end of the current year.

​

Cash	$154,000
Accounts receivable	210,000
Inventory	240,000
Prepaid expenses	15,000
Marketable securities	350,000
Property, plant, and equipment	375,000
Accounts payable	245,000
Accrued liabilities	4,000
Income tax payable	10,000
Notes payable, short-term	85,000

​

Determine the working capital.

Answer 1

Determination of working capital
Current Assets
a)Cash	$        154,000
b)Accounts receivable	$        210,000
c)Inventory	$        240,000
d)Prepaid expense	$          15,000
e)Marketable securities	$        350,000
Total	$        969,000
Current Liabilities
a)Accounts payable	$        245,000
b)Accrues libilities	$            4,000
c)Income tax payale	$          10,000
d)Notes payable	$          85,000
Total	$        344,000
Working Capital	$        625,000
(Current assets-Current liabilities)