Freiman Corporation's most recent balance sheet and income statement appear below:Balance SheetDecember 31, Year 2 and Year 1(in thousands of dollars) Year 2Year 1Assets Current assets: Cash$160 $120 Accounts receivable, net 220 240 Inventory 120 130 Prepaid expenses 40 40 Total current assets 540 530 Plant and equipment, net 700 700 Total assets$ 1,240 $ 1,230 Liabilities and Stockholders' Equity Current liabilities: Accounts payable$130 $150 Accrued liabilities 90 90 Notes payable, short term 60 70 Total current liabilities 280 310 Bonds payable 280 290 Total liabilities 560 600 Stockholders' equity: Common stock, $2 par value 100 100

Question

Additional paid-in capital 200  200   Retained earnings 380  330 Total stockholders' equity 680  630 Total liabilities & stockholders' equity$ 1,240 $ 1,230 Income StatementFor the Year Ended December 31, Year 2(in thousands of dollars)Sales (all on account)$1,310 Cost of goods sold 780 Gross margin 530 Selling and administrative expenses 359 Net operating income 171 Interest expense 35 Net income before taxes 136 Income taxes (30%) 41 Net income$  95 The working capital at the end of Year 2 is:

A. $540 thousand
B. $260 thousand
C. $680 thousand
D. $700 thousand

Answer 1

Answer: B