Question

Listed below are year-end account balances ($ in millions) taken from the records of Symphony Stores. Debit Credit Accounts receivable-trade 709 Building and equipment 923 Cash-checking 41 Interest receivable 43 Inventory 20 Land 150 Notes receivable (long-term) 495 Petty cash funds 9 Prepaid rent 35 Supplies 8 Trademark 55 Accounts payable-trade 633 Accumulated depreciation 71 Additional paid-in capital 483 Allowance for uncollectible accounts 15 Cash dividends payable 28 Common stock, at par 12 Income tax payable 62 Notes payable (long-term) 876 Retained earnings 282 Deferred revenues 26 TOTALS 2,488 2,488 What is the amount of working capital for Symphony

Answer 1

Answer:

$101

Explanation:

The computation of the working capital is shown below:

As we know that

Working capital = Current assets - current liabilities

where,

Current assets = Account receivable + checking cash + interest receivable + inventory + petty cash funds + prepaid expense + supplies

= $709 + $41 + $43 + $20 + $9 + $35 + $8

= $865

And, the current liabilities is

= Account payable of trade +  Allowance for uncollectible accounts + cash dividend payable + income tax payable + deferred revenues

= $633 + $15 + $28 + $62 + $26

= $764

So, the working capital is

= $865 - $764

= $101