Tre-Bien Bakeries generated net income of $233,412 this year. At year end, the company had accounts receivables of $47,199, inventory of $63,781, and cash of $21,461. It also had accounts payables of $51,369, short-term notes payables of $11,417, and accrued taxes of $6,145. The net working capital of the firm is

Question

Quizplus · Accepted Answer

Net working capital is calculated by subtracting current liabilities from current assets. 
Current assets = accounts receivables + inventory + cash = $47,199 + $63,781 + $21,461 = $132,441
Current liabilities = accounts payables + short-term notes payables + accrued taxes = $51,369 + $11,417 + $6,145 = $68,931
Therefore, net working capital = current assets - current liabilities = $132,441 - $68,931 = $63,510. The correct answer is B.

Tre-Bien Bakeries Generated Net Income of $233,412 This Year