Asked by Anthony Espino on May 31, 2024
Verified
Data from Dunshee Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730.The working capital at the end of Year 2 is:
A) $270
B) $500
C) $770
D) $740
Working Capital
The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the company.
Financial Data
Numeric information related to financial aspects of a business, including income, expenses, assets, and liabilities.
Sales On Account
Transactions where goods or services are provided to a customer with an agreement to pay later.
- Assess and acknowledge the significance of working capital.
Verified Answer
ZK
Zybrea KnightJun 05, 2024
Final Answer :
A
Explanation :
Working capital = Current assets - Current liabilities
From the balance sheet, we can see that:
Current assets = $1,350
Current liabilities = $1,080
Therefore, working capital = $1,350 - $1,080 = $270
The sales and cost of goods sold information is not relevant to calculating the working capital.
From the balance sheet, we can see that:
Current assets = $1,350
Current liabilities = $1,080
Therefore, working capital = $1,350 - $1,080 = $270
The sales and cost of goods sold information is not relevant to calculating the working capital.
Learning Objectives
- Assess and acknowledge the significance of working capital.