Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios.

-The total amount of working capital for National Textile is
A)$2,000.
B)$6,000.
C)$4,000.
D)$30,000.

Question

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios.

-The total amount of working capital for National Textile is
A)$2,000. 
B)$6,000. 
C)$4,000. 
D)$30,000.

Quizplus · Accepted Answer

Working capital is calculated as current assets minus current liabilities. Using the ending balances from the balance sheet, we get:
Working capital = $16,000 – $12,000 = $4,000

Use This Balance Sheet and Income Statement to Answer the Following