Siskiyou Corp.has cash of $75,000; short-term notes payable of $100,000; accounts receivables of $275,000; accounts payable of $135,000: inventories of $350,000; and accrued expenses of $75,000.What is the firm's net working capital?
A) $390,000
B) $175,000
C) $700,000
D) $210,000

Question

Quizplus · Accepted Answer

Net working capital = Current assets - Current liabilitiesCurrent assets = Cash + Accounts receivable + Inventories = $75,000 + $275,000 + $350,000 = $700,000Current liabilities = Short-term notes payable + Accounts payable + Accrued expenses = $100,000 + $135,000 + $75,000 = $310,000Net working capital = $700,000 - $310,000 = $390,000