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3 years ago

Based on the given information, what will be the working capital of the company?

Business

1 answer:

Romashka-Z-Leto [24]3 years ago

7 0

Answer:

$37,000

Explanation:

Working capital indicates the difference between a company's current assets and its current liabilities.

Current assets include such as cash at hand, bank balances, cash equivalents, and inventories. Current liabilities are accounts payable, bills, and short term debts.

in this case,

Current assets include

Inventory $50,000

Cash at Bank $ 5,000

prepaid rent <u> $5,000</u>

Total current assets <u>$60,000</u>

current liabilities

Notes Payable $20,000

tax payable <u> $3,000</u>

Total current liabilities <u> $23,000</u>

Working capital

= $60,000 - $23,000

= $37,000

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