You are evaluating the balance sheet for Goodman's Bees Corporation. From the balance sheet you find the following balances: Cash and marketable securities = $200,000, Accounts receivable = $1,100,000, Inventory = $2,000,000, Accrued wages and taxes = $500,000, Accounts payable = $600,000, and Notes payable = $100,000. Calculate Goodman's Bees' net working capital.
A) $2,000,000
B) $2,100,000
C) $1,400,000
D) $1,900,000

Question

Quizplus · Accepted Answer

Net working capital is calculated as (current assets - current liabilities).

Therefore, Goodman's Bees' net working capital is:

($200,000 + $1,100,000 + $2,000,000) - ($500,000 + $600,000 + $100,000) = $2,100,000 - $1,200,000 = $900,000.

Therefore, the best choice is option B.

You Are Evaluating the Balance Sheet for Goodman's Bees Corporation