TABLE 19.1
Use the information to answer following question(s).
TrinityApps Corporation Balance Sheet December 31, 20xx
-Refer to Table 19.1. If TrinityApps increases inventory by $10,000 and A/P also by $10,000, the net change in NWC is:
A)$20,000
B)$10,000
C)$0
D)none of the above

Question

TABLE 19.1
Use the information to answer following question(s).
TrinityApps Corporation Balance Sheet December 31, 20xx 
-Refer to Table 19.1. If TrinityApps increases inventory by $10,000 and A/P also by $10,000, the net change in NWC is:
A)$20,000 
B)$10,000 
C)$0 
D)none of the above

Quizplus · Accepted Answer

The formula for calculating Net Change in Working Capital (NWC) is NWC = Current Assets - Current Liabilities. 
If TrinityApps increases inventory by $10,000, then Current Assets increases by $10,000. 
If A/P also increases by $10,000, then Current Liabilities also increase by $10,000. 
Therefore, the Net Change in Working Capital (NWC) is ($10,000 - $10,000) = $0. So, the correct choice is C.

TABLE 19.1 Use the Information to Answer Following Question(s)