Question

Swinnerton Clothing Company's balance sheet showed total current assets of $1,800, all of which were required in operations. Its current liabilities consisted of $575 of accounts payable, $300 of 6% short-term notes payable to the bank, and $145 of accrued wages and taxes. What was its net operating working capital that was financed by investors? Select the correct answer. a. $1,096 b. $1,088 c. $1,112 d. $1,080 e. $1,104

Answer 1

Answer:

d. $1,080

Explanation:

The computation of the net operating working capital that was financed by investors is shown below:

= Total current assets - account payable - accrued wages and taxes

= $1,800 - $575 - $145

= $1,080

By deducting the account payable and accrued wages from the total current assets we can calculate the net operating working capital and the same is to be considered