Macmillan Corporation has provided the following financial data:Balance SheetDecember 31, Year 2 and Year 1AssetsYear 2Year 1Current assets: Cash$156,000 $120,000 Accounts receivable, net 268,000 280,000 Inventory 146,000 130,000 Prepaid expenses 20,000 20,000 Total current assets 590,000 550,000 Plant and equipment, net 732,000 760,000 Total assets$ 1,322,000 $ 1,310,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable$175,000 $180,000 Accrued liabilities 46,000 50,000 Notes payable, short term 80,000 80,000 Total current liabilities 301,000 310,000 Bonds payable 190,000 190,000 Total liabilities 491,000 500,000 Stockholders' equity: Common

Question

stock, $5 par value 450,000  450,000   Additional paid-in capital 70,000  70,000   Retained earnings 311,000  290,000 Total stockholders' equity 831,000  810,000 Total liabilities & stockholders' equity$ 1,322,000 $ 1,310,000 Income Statement-Year 2For the Year Ended December 31, Year 2Sales (all on account)$1,390,000 Cost of goods sold 830,000 Gross margin 560,000 Operating expenses 500,615 Net operating income 59,385 Interest expense 16,000 Net income before taxes 43,385 Income taxes (35%) 15,185 Net income$  28,200 Dividends on common stock during Year 2 totaled $7,200. The market price of common stock at the end of Year 2 was $3.69 per share.The company's working capital at the end of Year 2 is:

A. $590,000
B. $289,000
C. $732,000
D. $831,000

Answer 1

Answer: B