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12 October, 08:37

Swinnerton Clothing Company's balance sheet showed total current assets of $2,250, all of which were required in operations. Its current liabilities consisted of $575 of accounts payable, $300 of 6% short-term notes payable to the bank, and $145 of accrued wages and taxes. What was its net operating working capital that was financed by investors?

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  1. 12 October, 08:38
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    Answer: $1,530

    Explanation:

    It's net working capital that was financed by investors include the following figures,

    Total current Assets.

    Accounts Payables and Accrued wages need to be deducted because they came about as a result of operations and are neither of debt or equity financing so are considered free.

    So, in calculating we have,

    = 2,250 - 575 - 145

    = $1,530

    Swinnerton Clothing Company's net operating working capital that was financed by investors is $1,530
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