Question

Owen Monie is attempting to categorize several items from his company's financial statements so he can determine his working capital. Owen notices the following categories of accounts and amounts:

•cash $8,800
•accounts payable $17,250
•accounts receiveable $22,100
•sales tax due city $3,125
•sales tax due the state department of revenue $1,500
•inventory $26,500
•wages payable $7,100
•taxes payable (federal) $5,000
•money market fund $18,750
what is Owen's gross working capital?

Answer 1

Compute the gross working capital, using the equation as shown below:

Gross working capital = Cash + Accounts receivables + Inventory + Money market funds

                                    = $8,800 + $22,100 + $26,500 + $18,750

                                    = $76,150

Hence, the gross working capital is $76,150.