Question

he comparative financial statements prepared at December 31, 2015, for Prince Company showed the following summarized data:

	2015			2014
Income statement:
Sales revenue	$	190,300	*	$	167,400
Cost of goods sold		112,500			100,600
Gross profit		77,800			66,800
Operating expenses and interest expense		57,000			54,000
Pretax income		20,800			12,800
Income tax		6,240			3,840
Net income	$	14,560		$	8,960
Balance sheet:
Cash	$	5,100		$	5,500
Accounts receivable (net)		15,000			17,900
Inventory		40,400			32,500
Operational assets (net)		46,600			36,100
	$	107,100		$	92,000
Current liabilities (no interest)	$	14,700		$	15,700
Long-term liabilities (10% interest)		44,300			44,300
Common stock (par $5)		28,200			28,200
Retained earnings		19,900			3,800
	$	107,100		$	92,000

By what amount did working capital change?

Answer 1

All amounts are in $.

Working capital computation:
Years	2015	2014
Current assets:
Cash	5100	5500
Accounts receivable (Net)	15000	17900
Inventory	40400	32500
(A): Total current assets	62515	57914
Current liabilities:
Current liabilities (No interest)	14700	15700
(B): Total current liabilities	14700	15700
Working capital (A - B)	47815	42214

Change in working capital
Working capital of 2014	42214
Working capital of 2015	47815
Increase in working capital (47815 - 42214)	5601