Use the information given below to answer the following questions:
James has a business mowing lawns. On 31 December 2012, he has a utility truck worth $7000, a mower worth $250 and an edger worth $110. Fuel on hand cost $70. Customers owe him $360 and he owes his fuel supplier $90. He owes his sister $5000, which is a long-term loan, and he has $110 in his business bank account.
-What is James's working capital?
A) $2810
B) $450
C) $380
D) $430.

Question

Quizplus · Accepted Answer

Working capital is calculated as current assets minus current liabilities. James's current assets are $360 (accounts receivable) + $70 (fuel) + $110 (bank account) = $540. His current liabilities are $90 (fuel supplier). Therefore, his working capital is $540 - $90 = $450.

Use the Information Given Below to Answer the Following Questions