Freiman Corporation's most recent balance sheet and income statement appear below: The working capital at the end of Year 2 is:
A)$260 thousand
B)$680 thousand
C)$700 thousand
D)$540 thousand

Question

Freiman Corporation's most recent balance sheet and income statement appear below:   The working capital at the end of Year 2 is:
A)$260 thousand 
B)$680 thousand 
C)$700 thousand 
D)$540 thousand

Quizplus · Accepted Answer

Working capital is calculated by subtracting current liabilities from current assets. From the balance sheet, we see that current assets at the end of Year 2 are $940,000 and current liabilities are $680,000. Therefore, Working Capital = $940,000 - $680,000 = $260,000. Thus, the correct answer is choice A.

Freiman Corporation's Most Recent Balance Sheet and Income Statement Appear