Jobston,Inc.
The balance sheet of Jobston Inc.includes the following items:

$\begin{array}{lr}
\text { Cash } & \$ 22,400 \
\text { Accounts receivable } & 11,700 \
\text { Inventory } & 23,300 \
\text { Prepaid insurance } & 1,040 \
\text { Land } & 80,000 \
\text { Accounts payable } & 47,500 \
\text { Salaries payable } & 1,200 \
\text { Capital stock } & 84,040 \
\text { Retained earnings } & 5,700
\end{array}$
-Read the information about Jobston,Inc.What is Jobston's working capital?
A)$58,440
B)$89,740
C)$84,040
D)$9,740

Question

Jobston,Inc.
The balance sheet of Jobston Inc.includes the following items:
​
 $\begin{array}{lr}
\text { Cash } & \$ 22,400 \
\text { Accounts receivable } & 11,700 \
\text { Inventory } & 23,300 \
\text { Prepaid insurance } & 1,040 \
\text { Land } & 80,000 \
\text { Accounts payable } & 47,500 \
\text { Salaries payable } & 1,200 \
\text { Capital stock } & 84,040 \
\text { Retained earnings } & 5,700
\end{array}$ ​
-Read the information about Jobston,Inc.What is Jobston's working capital?
A)$58,440
B)$89,740
C)$84,040
D)$9,740

Quizplus · Accepted Answer

Working capital is calculated as current assets minus current liabilities. Here, current assets are Cash + Accounts receivable + Inventory + Prepaid insurance = $22,400 + $11,700 + $23,300 + $1,040 = $58,440. Current liabilities are Accounts payable + Salaries payable = $47,500 + $1,200 = $48,700. Therefore, working capital = $58,440 - $48,700 = $9,740.

Jobston,Inc ​ -Read the Information About Jobston,Inc

Jobston,Inc
-Read the Information About Jobston,Inc