Question

The financial statements for Watertown Service Company include the following​ items:20172016Cash​ $46,500​ $41,000Shortminus−term Investments​24,000​13,000Net Accounts Receivable​57,000​50,000Merchandise Inventory​158,000​49,000Total Assets​535,000​551,000Accounts Payable​133,500​126,000Salaries Payable​17,000​20,000​Long-term Note Payable​57,000​50,000Compute working capital for 2017

Answer 1

Answer:

The working capital for 2017 is $15,500

Explanation:

Working capital: It shows a difference between the currents and the current liabilities

In mathematically,

Working Capital = Current Assets - current liabilities

where,

Total current assets = Cash + short-term investments + net accounts receivable + merchandise inventory

= $46,500 + $24,000 + $57,000 + $158,000

= $285,500

And, the current liabilities = Accounts Payable​ + Salaries Payable

                                           = $133,500 + $17,000

                                           = $150,500

Now put these values to the above formula  

So, the value would equal to

= $285,500 - $150,500

= $15,500