1. Joe Fellows is attempting to categorize several items from his company's financial statements so he can determine his working capital. Joe notices the following categories of accounts and amounts: Cash, $3,500; accounts payable, $10,200, accounts receivable, $15,000; sales taxes due the city of Phoenix, $750; sales taxes due the Arizona Department of Revenue, $3,450; inventory $17,500; wages payable, $5,350; taxes payable (federal), $2,750; money market fund, $12,300; and computer, $3,400.
a) List accounts classified as current assets and as current liabilities.
b) Determine the amount of gross working capital.
c) Determine the amount of net working capital.
d) What is Joe's current ratio?
The problem deals with estimating the working capital and other accounting ratios of a firm.