Question 8 3.5 pts XYZ Company began operations in 2019 and ent ered into the fo

Question

Question 8 3.5 pts XYZ Company began operations in 2019 and ent ered into the following transactions during the year: May 1: $280,000 cash Sold common stock to owners for May 10: ,880 on account Purchased inventory costing $40 June 1: Purchased equipment for $48,800 cash. The equipment was assigned a 1e-year life and a $6,000 residual value August 1 Purchased a two-year insurance policy for $24,000 cash. October 3: that was purchased on 8; the customer did ed to pay XYZ Company Sold one-half of the inventory May 18 to a customer for $49,86e not pay for the goods, but agre within ninety days November 9: Paid stockholders $10,800 cash as a dividend. December 17: Collected a $22,000 partial pay ment fron the customer who purchased the inventory on October3 December 31: Recorded adjusting entries rela ted to the equipment and the prepaid insurance Calculate the amount of working capital reported by XYZ Company at December 31, 2019 after all the above transa ctions are recorded and all necessary adjusting entries are made and posted

Explanation / Answer

Calculation of current assets and current liabilities Current Assets Current liabilities Cash 140000 Inventory 20000 Accounts Payable 40000 Prepaid Insurance 19000 Accounts Receivable 27000 Total 206000 40000 Working Capital Current Assets - Current Liabilities 166000 Answer

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