Trent Corporation has total current assets equal to $50,000 and working capital of $20,000.Fleming Company has the same amount of working capital,but it has total current assets of $300,000.The company with the better working capital position is:
A) Fleming Company
B) Trent Corporation
C) They both have equally good working capital positions.
D) indeterminable with the information given

Question

Quizplus · Accepted Answer

Working capital is calculated by subtracting total current liabilities from total current assets. Trent Corporation has a lower total current asset balance compared to Fleming Company but has the same working capital. This means that Trent Corporation likely has a higher amount of current liabilities. Fleming Company, on the other hand, has a higher total current asset balance with the same working capital, indicating that it likely has a lower amount of current liabilities. Therefore, Fleming Company has the better working capital position.

Trent Corporation Has Total Current Assets Equal to $50,000 and Working