You are evaluating the balance sheet for Campus Corporation. From the balance sheet you find the following balances: cash and marketable securities = $400,000, accounts receivable = $200,000, inventory = $100,000, accrued wages and taxes = $10,000, accounts payable = $300,000, and notes payable = $600,000. What is Campus's net working capital?
A) -$210,000
B) $700,000
C) $910,000
D) $1,610,000

Question

Quizplus · Accepted Answer

Net working capital is calculated as current assets minus current liabilities. Here, current assets = $400,000 (cash and marketable securities) + $200,000 (accounts receivable) + $100,000 (inventory) = $700,000. Current liabilities = $10,000 (accrued wages and taxes) + $300,000 (accounts payable) + $600,000 (notes payable) = $910,000. Therefore, net working capital = $700,000 - $910,000 = -$210,000.

You Are Evaluating the Balance Sheet for Campus Corporation