McRae Corporation's total current assets are $380,000, its noncurrent assets are $500,000, its total current liabilities are $340,000, its long-term liabilities are $250,000, and its stockholders' equity is $290,000. Working capital is:
A) $380,000
B) $40,000
C) $250,000
D) $290,000

Question

Quizplus · Accepted Answer

Working capital is calculated as current assets minus current liabilities. Therefore, working capital for McRae Corporation is:

$380,000 (total current assets) - $340,000 (total current liabilities) = $40,000.

Choice B is the correct answer.

McRae Corporation's Total Current Assets Are $380,000, Its Noncurrent Assets