Question

Chandler Sporting Goods produces baseball and football equipment and lines of clothing. This year the company had cash and marketable securities worth $335,485, accounts payables worth $1,159,357, inventory of $1,651,599, accounts receivables of $1,488,121, short-term notes payable worth $313,663, and other current assets of $121,427. What is the company's net working capital?
1. $3,596,632
2. $1,801,784
3. $2,123,612
4. $1,673,421

Answer 1

Answer:

3. $2,123,612

Explanation:

As we know that

Net working capital = Current assets - current liabilities

where,

Current assets = Cash and marketable securities + inventory + accounts receivables + other current assets

= $335,485 + $1,651,599 + $1,488,121 + $121,427

= $3,596,632

Current liabilities = Accounts payable +  short-term notes payable

                            = $1,159,357 + $313,663

                            = $1,473,020

So, the net working capital is $2,123,612