The financial statements of Barker Office Furniture Company include the following items
2017 2016
Cash $52,500 $49,000
Short-term Investments 32,000 17,000
Net Accounts Receivable 92,000 99,000
Merchandise Inventory 159,000 144,000
Total Assets 531,000 551,000
Total Current Liabilities 267,000 292,000
Long-term Note Payable 60,000 55,000
What is working capital for 2017?
A) $204,000
B) $68,500
C) $36,500
D) $90,500
B .B)
Working capital = Current assets - Current liabilities
Working capital = (Cash $52,500 + Short-term Investments $32,000 + Net Accounts Receivable $92,000 + Merchandise Inventory $159,000 ) - $267,000
Working Capital = $335,500 - $267,000
Working Capital = $68,500
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