Question

Accounts payable $ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 400,000 Prepaid expenses 2,000 Based on the data for Privett Company, what is the amount of working capital

Answer 1

Answer:

The amount of working capital is $113,000

Explanation:

Working capital is calculated by using following formula:

Working capital = Current assets - Current Liabilities

In Privett Company,

Current assets = Accounts receivable + Cash + Inventory + Marketable securities + Prepaid expenses = $35,000 + $25,000+ $72,000 + $36,000 + $2,000 = $170,000

Current Liabilities = Accounts payable + Accrued liabilities + Notes payable (short-term) = $30,000 + $7,000 + $20,000 = $57,000

Working capital = $170,000 - $57,000 = $113,000

Answer 2

Answer:

Working capital is $113,000

Explanation:

Working capital is the funds made available for day to day operation of a business.

The capital is used in paying creditors,purchasing stock as well as other short term obligations such as payment of salaries.

Working =Current assets-current liabilities

currents assets=accounts receivable+cash+inventory+marketable securities+prepaid expenses

current assets=$35,000+$25,000+$72,000+$36,000+$2,000=$170,000

current liabilities=account payables+accrued liabilities+notes payable

current liabilities=$30,000+$7000+$20,000=$57,000

working capital=$170,000-$57,000=$113,000