Use this balance sheet and income statement for the first year of operations for Cane Construction to answer the following question.Use ending balances whenever average balances are required for computing ratios.

-The total amount of working capital for Cane Construction is
A)$4,000.
B)$14,000.
C)$6,000.
D)$2,000.

Question

Use this balance sheet and income statement for the first year of operations for Cane Construction to answer the following question.Use ending balances whenever average balances are required for computing ratios.

-The total amount of working capital for Cane Construction is

-The total amount of working capital for Cane Construction is
A)$4,000. 
B)$14,000. 
C)$6,000. 
D)$2,000.

Quizplus · Accepted Answer

Working capital is calculated as current assets minus current liabilities. From the balance sheet, we can see that Cane Construction's current assets are $20,000 and their current liabilities are $14,000. Therefore, their working capital is $6,000 ($20,000 - $14,000).

Use This Balance Sheet and Income Statement for the First