For the year, B&K United increased current liabilities by $1,400, decreased cash by $1,200, increased net fixed assets by $340, increased accounts receivable by $200, and decreased inventory by $150. What is the annual change in net working capital

Question

Elaine Farley

Business

15 December, 16:35

For the year, B&K United increased current liabilities by $1,400, decreased cash by $1,200, increased net fixed assets by $340, increased accounts receivable by $200, and decreased inventory by $150. What is the annual change in net working capital

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Answers (1)

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Iris Pugh · Answer 1

net working capital decreased by $2,250 during the year

Explanation:

net working capital = current assets - current liabilities

current assets: - $1,200 (cash) + $200 (accounts receivable) - $150 (inventory) = net change of - $850

current liabilities: + $1,400 (current liabilities) = net change of + $1,400

net change in working capital = - $850 - $1,400 = - $2,250

fixed assets are not included in this calculation