Question

Dandee Lions, Inc. Has a cash balance of $105,000; accounts payable of $290,000; inventory of $213,000; accounts receivable of $310,000; notes payable of $95,000; and accrued wages and taxes of $65,000. How much net working capital does the firm need to fund?

Answer 1

Answer:

The answer is $758,000.

Explanation:

Net working capital is total current asset minus total current liability i.e total current asset - total current liability

Total current assets equals($918,000) $105,000 +$290,000 + $213,000 + $310,000.

Total current liabilities equal($160,000) $95,000 +$65,000

Therefore, net working capital is:

$918,000 - $160,000

= $758,000