Wu Systems has the following balance sheet. Assume that all current assets are used in operations. How much net operating working capital does the firm have? Cash $ 100 Accounts payable $ 200 Accounts receivable 650 Accruals 110 Inventory 550 Notes payable 590 Current assets $ 1,300 Current liabilities $ 900 Net fixed assets $ 1,000 Long-term debt 600 Common equity 300 Retained earnings 500 Total assets $ 2,300 Total liab. & equity $ 2,300 a. $782 b. $1,168 c. $911 d. $1,010 e. $990

Question

Business

Ray Bright

13 May, 20:36

Wu Systems has the following balance sheet. Assume that all current assets are used in operations. How much net operating working capital does the firm have? Cash $ 100 Accounts payable $ 200 Accounts receivable 650 Accruals 110 Inventory 550 Notes payable 590 Current assets $ 1,300 Current liabilities $ 900 Net fixed assets $ 1,000 Long-term debt 600 Common equity 300 Retained earnings 500 Total assets $ 2,300 Total liab. & equity $ 2,300 a. $782 b. $1,168 c. $911 d. $1,010 e. $990

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Marilyn Mata · Answer 1

It is e $990

Explanation:

Notice it is asking for net operating working capital, not just working capital.

Cash + Account Receivable + inventory - accurals expenses - Account payable = net operating working capital

100 + 650 + 550 - 110 - 200 =

1300 - 310 = 990

While working capital is current assets - current liabilities