XYz Company began pperations in 2019 and entered into the following transactions
ID: 2340538 • Letter: X
Question
XYz Company began pperations in 2019 and entered into the following transactions during the year May 1: May 18: Sold common stock to owners for $208,80 cash Purchased inventory costing $40,e00 on account June 1: Purchased equipment for $48,e0e cash. The equipment was assigned a 10-year life and a $6,aee resídual value. August 1: Purchased a twolyear insurance policy for $24,00e cash. öctober 3: sold one-half of the inventory that was punchased on Hay 10 to a customer for $49.000: the customer did not pay for the goods, but agreed to pay XWZ Company within ninety days. |Novemben 9 Paid stockhölders $10,0e0 cash as a dividend. becember 17: collected a $22,008 parti peyment from the custonen wno purcnased the inventory on octoper3 December 31: Recorded ad usting entinies related to the equipnent and the prepaid insurance Caiculate the anount of working capital reported by XY Conpany December 31, 2019 after adl the above trensactions ane recorded and all necessary adjusting entries are nade and postedExplanation / Answer
Calculate following :
Working capital = Current assets-Current liabilities
= 206000-40000
Working capital = 166000
Cash (200000-48000-24000-10000+22000) 140000 Account receivable (49000-22000) 27000 Inventory (40000-20000) 20000 Prepaid insurance (24000-24000*5/24) 19000 Total current assets 206000 Account payable 40000Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.