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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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  1. 11 September, 07:39
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    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
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