Question

The financial statements of Carrier Office Furniture Company include the following​ items: 2019 2018 Cash ​ $42,500 ​ $42,000 Shortminusterm Investments ​28,000 ​19,000 Net Accounts Receivable ​102,000 ​98,000 Merchandise Inventory ​166,000 ​148,000 Total Assets ​527,000 ​547,000 Total Current Liabilities ​273,000 ​285,000 ​Long-term Note Payable ​64,000 ​60,000
What is working capital for​ 2019?

Answer 1

Answer:

$65,500

Explanation:

Data provided in the question:

                                              2019       2018

Cash ​                                 $42,500 ​   $42,000

Short-term Investments ​   28,000     ​19,000

Net Accounts Receivable ​102,000    ​98,000

Merchandise Inventory     ​166,000    ​148,000

Total Assets                       ​527,000    ​547,000

Total Current Liabilities ​    273,000 ​   285,000

​Long-term Note Payable   ​64,000      ​60,000

Now,

Working capital = Current assets - Current liabilities

Also,

Current assets (i.e for the year 2019 )

= Cash + Short-term Investments + Net Accounts Receivable + Merchandise Inventory

= $42,500 + $28,000 + $102,000 + $166,000

= $338,500

and,

Current liabilities =  $273,000

Therefore,

Working capital for 2019 = $338,500 - $273,000

= $65,500