Jones Company has cash of $20,000, accounts receivable of $30,000, inventory of $16,000, and equipment of $50,000. Assuming current liabilities of $24,000, this company's working capital is:
A)$6,000.
B)$26,000.
C)$42,000.
D)$72,000.

Question

Quizplus · Accepted Answer

Working capital is: current assets - current liabilities. The cash ($20,000), accounts receivable ($30,000) and inventory ($16,000) are all current assets. Current assets ($66,000) - current liabilities ($24,000) = $42,000.

Jones Company Has Cash of $20,000, Accounts Receivable of $30,000