Answer :
Answer:
A. $113,000
Explanation:
Working capital is the difference between current asset less current liabilities.
Working capital = current asset - current liabilities.
Let’s just determine how much is the current asset first.
Accounts receivable $35,000
Cash $25,000
Inventory $72,000
Marketable securities $36,000
Prepaid expenses $2,000
Total current assets $170,000
Next, let’s compute how much the current liabilities are,
Accounts payable $30,000
Accrued expenses $7,000
Notes payable (short-term) $20,000
Total current liabilities $57,000
Now, we can compute the working capital.
Working capital = $170,000 - $57,000
=$113,000
*Intangible assets, long term investments and property & equipment are all non-current assets.
*Long-term liabilities is also a non-current liability, therefore excluded in the computation.