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25 May, 18:53

Zumbahlen Inc. has the following balance sheet. How much total operating capital does the firm have?

Cash $ 20.00

Accounts payable $ 30.00

Short-term investments 50.00

Accruals 50.00

Accounts receivable 20.00

Notes payable 30.00

Inventory 60.00

Current liabilities $110.00

Current assets $150.00

Long-term debt 70.00

Gross fixed assets $140.00

Common stock 30.00

Accumulated deprec. 40.00

Retained earnings 40.00

Net fixed assets $100.00

Total common equity $ 70.00

Total assets $250.00

Total liab. & equity $250.00

(A) $120.00

(B) $115.60

(C) $122.20

(D) $117.80

(E) $124.40

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Answers (1)
  1. 25 May, 21:43
    0
    Answer: the operating capital is $40.00

    Explanation:

    operating capital is also known as working capital. it is the value of running a business on daily basis. it is also the value of short term resources available for use in daily activities. it is current assets minus current liabilities of a business.

    current assets = cash + inventory + account receivable + short term investment = 20+50+20+60 = 150

    current liabilities = accruals + account payable + notes payable=50+30+30=110

    operating capital = 150 - 110 = 40
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