Train Companys balance sheet included cash 4000000 accounts

Train Company\'s balance sheet included cash ($4,000,000), accounts receivable ($16,000,000), inventories ($10,000,000), prepaid expenses ($2,000,000), accounts payable ($9,000,000), and accrued expenses ($7,000,000). Working capital is ___________.

Question 22 options:

$16,000,000

$4,000,0000

$20,000,000

$7,000,000

none of these

Solution

Wroking Capital = Current Assets- Current Liabilites

Current Assets = Cash + Accounts receivable + Inventories + Prepaid Expenses

Cuurent Assets = 4,000,000+ 16,000,000 + 10,000,000 + 2,000,000

Current Assers = 32,000,000

Current Liabilities = Accounts Payable + Accured Expenses

Current Liabilities = 9,000,000 + 7,000,000

Current Liabilites = 16,000,000

Working Capital = Crrent Assets- Cuurent Liabilities

Working Capital = 32,000,000 - 16,000,000

Working Capital = 16,000,000