Answer:
b. 240,000
Explanation:
Calculation to determine the total amount of working capital
First step is to calculate the Current assets
Using this formula
Current assets = Cash + Accounts receivable + Inventory + Prepaid insurance
Let plug in the formula
Current assets= $70,000 + 100,000 + 140,000 + 80,000
Current assets= $390000
Second step is to calculate the Current liabilities using this formula
Current liabilities = Accounts payable + Salaries and wages payable
Let plug in the formula
Current liabilities= $130,000 + 20,000
Current liabilities= $75,000
Now let calculate the working capital using this formula
Working capital = Current assets - Current liabilities
Let plug in the formula
Working capital = $390,000 - 150,000
Working capital = $240,000
Therefore the Working capital is $240,000
