Question

Tre-Bien Bakeries generated net income of $233,412 this year. At year end, the company had accounts receivables of $47,199, inventory of $63,781, and cash of $21,461. It also had accounts payables of $51,369, short-term notes payables of $11,417, and accrued taxes of $6,145. The net working capital of the firm is1. $68,9312. $63,510. 3. $69,655. 4. None of these.

Answer 1

Answer:

Option B- $63510 is the correct option.

Explanation:

Remember that:

Net Working Capital = Current Assets - Current Liabilities

Current assets includes receivables, cash and inventory, and current liabilities include accounts payable, short term notes payable and accrued taxes.

Putting value of current assets and current liabilities, we have:

Net Working Capital = ($47,199+$63,781+$21,461) - ($51,369+$11,417+$6145)

Net Working Capital = $132,441 - $68931 = $63,510

So the option B is the correct option.