1. Based on the following data, what is the amount of working capital? Accounts
ID: 2500295 • Letter: 1
Question
1. Based on the following data, what is the amount of working capital?
Accounts payable....................$32,000
Accounts receivable....................64,000
Accrued liabilities....................7,000
Cash.........................................20,000
Intangible assets............................40,000
Inventory...............................................72,000
Long-term investments...............................100,000
Long-term liabilities.....................................75,000
Marketable securities.................................35,000
Notes payable (short-term)........................20,000
Property, plant, and equipment.................625,000
Prepaid expenses.........................................2,000
WHAT IS WORKING CAPITAL?
a. $162,000
b. $134,000
c. $193,000
d. $62,000
2. Use the following data to determine the total dollar amount of assets to be classified as current assets.
Cash..............................................$60,000
Prepaid insurance..........................40,000
Accounts receivable......................50,000
Inventory.........................................70,000
Land held for investment................80,000
Land................................................95,000
Buildings..................$100,00
Less Accumulated
Depreciation (30,000) 70,000
Trademarks 70,000
Total Assets $535,000
WHAT IS CURRENT ASSETS?
a. $220,000
b. $150,000
c. $300,000
d. $180,000
3. Cash.......................................$60,000
Prepaid insurance....................40,000
Accounts Receivable...............50,000
Inventory...................................70,000
Land held for investment..........80,000
Land..........................................95,000
Buildings..........$100,000
Less Accumulated
Depreciation.........(30,000) ..........70,000
Trademarks.............................................70,000
Total Assets.........................................$535,000
Accounts Payable............................$65,000
Salaries Payable.............................. 10,000
Mortgage Payable............................ 90,000
Total Liabilities.............
WORKING CAPITAL IS?
a. $155,000
b. $145,000
c. $60,000
d. $150,000
4. Cash.................................$50,000
Prepaid insurance............. 30,000
Accounts receivable..........40,000
Inventory............................70,000
Land held for investment...80,000
Land...................................75,000
Buildings.....$110,000
Less Accumulated
Depreciation.....(20,000)............90,000
Trademarks.........................................70,000
Total Assets.....................................$525,000
Accounts Payable..............................$55,000
Salaries payable..................................10,000
Mortgage payable................................90,000
Total Liabilities..................................$155,000
CURRENT RATIO IS?
a. 1.85: 1
b. 2.92: 1
c. 3.45: 1
d. 1.38: 1
Explanation / Answer
1 )Current asset = 64000 + 20000 +72000 +35000+2000 = 193000
current liabilities = 32000 + 7000 + 20000 = 59000
Working capital = 193000 - 59000 = 134000
correct option is "B" - 134000
2)Current asset = 60000 + 40000 + 50000 +70000 = 220000
correct option is "A"
3) CA = 60000 +40000 +50000 +70000 = 220000
CL = 65000 + 10000 = 75000
Working capital = 22000 - 75000 = 145000
correct option is "B"
4) CA = 50000 + 30000 +40000 + 70000 = 190000
CL = 55000 + 10000 = 65000
Current ratio = 190000 / 65000 = 2.92
correct option is "B" - 2.92 : 1
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