Accounts payable $ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 400,000 Prepaid expenses 2,000 Based on the data for Privett Company, what is the amount of working capital

Question

Bishop

Business

1 September, 19:22

Accounts payable $ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 400,000 Prepaid expenses 2,000 Based on the data for Privett Company, what is the amount of working capital

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Answers (1)

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Karen Brooks · Answer 1

The amount of working capital is $113,000

Explanation:

Working capital is calculated by using following formula:

Working capital = Current assets - Current Liabilities

In Privett Company,

Current assets = Accounts receivable + Cash + Inventory + Marketable securities + Prepaid expenses = $35,000 + $25,000 + $72,000 + $36,000 + $2,000 = $170,000

Current Liabilities = Accounts payable + Accrued liabilities + Notes payable (short-term) = $30,000 + $7,000 + $20,000 = $57,000

Working capital = $170,000 - $57,000 = $113,000