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Based on the following data, what is the amount of working capital? Accounts payable $62720 Accounts...

Based on the following data, what is the amount of working capital?

Accounts payable $62720
Accounts receivable 111720
Cash 68600
Intangible assets 98000
Inventory 135240
Long-term investments 156800
Long-term liabilities 196000
Short-term investments 78400
Notes payable (short-term) 54880
Property, plant, and equipment 1313200
Prepaid insurance 1960

$278320

$325360

$362600

$319480

Business   Accounting   
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Answer #1

Option (a) is correct

For working capital, we need to calculate current assets and current liabilities as per below:

Current assets = Accounts receivable + Cash + Inventory + short term investments + Prepaid insurance

Current assets = $111720 + $68600 + $135240 + $78400 + $1960

Current assets = $395920

Current liabilities = Accounts payable + Notes payable (short term)

Current liabilities = $62720 + $54880 = $117600

Now,

Working capital = Current assets - Current liabilities

Working capital = $395920 - $117600 = $278320

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