Use this balance sheet and income statement for the first year of operations for Layton Novelties,Inc.to answer the following question. The total amount of working capital of Layton Novelties is
A) $8,000
B) $28,000
C) $12,000
D) $4,000

Question

Use this balance sheet and income statement for the first year of operations for Layton Novelties,Inc.to answer the following question.   The total amount of working capital of Layton Novelties is
A) $8,000 
B) $28,000 
C) $12,000 
D) $4,000

Quizplus · Accepted Answer

Working Capital is calculated by subtracting current liabilities from current assets. In this case, the total current assets are $50,000 and the total current liabilities are $38,000. Therefore, the working capital of Layton Novelties is $12,000 ($50,000 - $38,000).

Use This Balance Sheet and Income Statement for the First