The financial statements for Watertown Service Company include the following items:20172016Cash $46,500 $41,000Shortminus-term Investments 24,000 13,000Net Accounts Receivable 57,000 50,000Merchandise Inventory 158,000 49,000Total Assets 535,000 551,000Accounts Payable 133,500 126,000Salaries Payable 17,000 20,000 Long-term Note Payable 57,000 50,000Compute working capital for 2017

Question

Amare Daniels

Business

11 September, 07:23

The financial statements for Watertown Service Company include the following items:20172016Cash $46,500 $41,000Shortminus-term Investments 24,000 13,000Net Accounts Receivable 57,000 50,000Merchandise Inventory 158,000 49,000Total Assets 535,000 551,000Accounts Payable 133,500 126,000Salaries Payable 17,000 20,000 Long-term Note Payable 57,000 50,000Compute working capital for 2017

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Layla Case · Answer 1

The working capital for 2017 is $15,500

Explanation:

Working capital: It shows a difference between the currents and the current liabilities

In mathematically,

Working Capital = Current Assets - current liabilities

where,

Total current assets = Cash + short-term investments + net accounts receivable + merchandise inventory

= $46,500 + $24,000 + $57,000 + $158,000

= $285,500

And, the current liabilities = Accounts Payable + Salaries Payable

= $133,500 + $17,000

= $150,500

Now put these values to the above formula

So, the value would equal to

= $285,500 - $150,500

= $15,500