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3 September, 18:45

BobCat Inc. has cash of $22,000, accounts receivable of $78,000, inventory of $62,000, prepaid insurance 8,000 and land of $90,000. The company has only one current liability account - salary payable of $64,000, what is working capital

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  1. 3 September, 18:48
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    Answer:$106000

    Explanation:

    Calculation of current assets

    Cash 22000

    Accounts receivable 78000

    Inventory 62000

    Prepaid insurance 8000

    Total current assets 170000

    Given

    Current Liabilities = 64000

    Working capital = current assets - current liabilities

    =170000 - 64000

    Working capital of Bob Cat Inc is $106000

    Here land is a fixed asset hence cannot be included in working capital. Current assets are the assets which can be liquidated quickly into cash. Current liabilities are the liabilities which will be paid of immediately.
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Home » Business » BobCat Inc. has cash of $22,000, accounts receivable of $78,000, inventory of $62,000, prepaid insurance 8,000 and land of $90,000. The company has only one current liability account - salary payable of $64,000, what is working capital
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