Question

3. Presented below is the ending balances of accounts for the Kansas Instruments Corporation at December 31, 2018.

Account Title		Debits			Credits
Cash	$	24,000
Accounts receivable		138,000
Raw materials		28,000
Note receivable		104,000
Interest receivable		7,000
Interest payable				$	9,000
Marketable securities		36,000
Land		54,000
Buildings		1,380,000
Accumulated depreciation—buildings					624,000
Work in process		46,000
Finished goods		93,000
Equipment		308,000
Accumulated depreciation—equipment					134,000
Patent (net of amortization)		124,000
Prepaid rent (for the next two years)		64,000
Deferred revenue					40,000
Accounts payable					184,000
Note payable					440,000
Cash restricted for payment of note payable		84,000
Allowance for uncollectible accounts					17,000
Sales revenue					880,000
Cost of goods sold		454,000
Rent expense		32,000

Additional information:

The note receivable, along with any accrued interest, is due on November 22, 2019.

The note payable is due in 2022. Interest is payable annually.

The marketable securities consist of treasury bills, all of which mature in the next year.

Deferred revenue will be recognized as revenue equally over the next two years.

Required:
Determine the company’s working capital (current assets minus current liabilities) at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Current assets:
Cash		24000
Accounts Receivable	138000
less: Allowance for uncollectible accounts	-17000	121000
Note receivable		104000
Interest Receivable		7000
Marketable securities		36000
Raw materials		28000
Work in process		46000
Finished goods		93000
Prepaid rent (one half of 64000)		32000
Total current assets			491000
Current liabilities:
Unearned Revenue (one half of 40000)		20000
Accounts Payable		184000
Interest Payable		9000
Total current libilities			213000
Working capital			278000