Question

a corporation is considering expanding operations. with the capital expansion, the current accounts are expected to change. management expects cash to increase by $20,000, accounts receivable by $40,000, and inventories by $60,000. at the same time accounts payable will increase by $50,000, accruals by $10,000, and long-term debt by $100,000. what is the change in net working capital? increase of $120,000 decrease of $60,000 decrease of $120,000 increase of $60,000

Answer 1

The capital account, is the a part of the stability of bills which information all transactions made among entities in a single USA with entities within side the relaxation of the world.

The required details for capital account in given paragraph

Change in running capital = boom in cash + boom in account receivables + boom in inventories -boom in payables - boom in accruals

=20000+40000+60000-50000-10000=60000

These transactions include imports and exports of goods, services, capital, and as switch bills which include overseas useful resource and remittances. The stability of bills consists of a capital account and a cutting-edge account though a narrower definition breaks down the capital account right into a economic account and a capital account. The capital account measures the modifications in country wide possession of assets, while the cutting-edge account measures the usa's internet income.

In accounting, the capital account indicates the internet really well worth of a commercial enterprise at a selected factor in time. It is likewise called owner's fairness for a sole proprietorship or shareholders' fairness for a corporation, and it's far suggested within side the backside segment of the stability sheet.

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