Help!!! Balance sheet: Tim Dye, the chief financial officer of Blackwell Automot

Question

Help!!!
Balance sheet: Tim Dye, the chief financial officer of Blackwell Automotive, Inc., is putting together this year's financial statements. He has gathered the following information. The firm had a cash balance of $23,015, accounts payable of $118,379, common stock of $313,299, retained earnings of $512,159, inventory of $223,171, goodwill and other assets equal to $78,656, net plant and equipment of $711,256, and short-term notes payable of $21,115. It also has accounts receivables of $130,584 and other current assets of $11,223. What level of working capital does Blackwell Automotive have?

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Explanation / Answer

Working Capital = Current Assets - Current Liabilities Current Assets = Cash + Inventory + Accounts Receivables + Other Current Assets Current Assets = $23,015 + $223,171 + $130,584 + $11,223 = $387,993 Current Liabilities = Accounts Payable + Short term notes payable Current Liabilities = $118,379 + $21,115 = $139,494 Working Capital = $387,993 - $139,494 = $248,499

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