The financial statements for Watertown Service Company include the following items
2017 2016
Cash $46,500 $41,000
Short-term Investments 24,000 13,000
Net Accounts Receivable 57,000 50,000
Merchandise Inventory 158,000 49,000
Total Assets 535,000 551,000
Accounts Payable 133,500 126,000
Salaries Payable 17,000 20,000
Long-term Note Payable 57,000 50,000
Compute working capital for 2017.
A) $128,000
B) $78,000
C) $135,000
D) $27,000
C .C)
Working capital = Current assets - Current liabilities
Working capital = (Cash $46,500 + Short-term Investments $24,000 + Net Accounts Receivable $57,000 + Merchandise Inventory $158,000 ) - (Accounts Payable $133,500 + Salaries Payable $17,000 )
Working Capital = $285,500 - 150,500
Working Capital = $135,000
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