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    Calculating Working Capital

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    The balance sheet of Hart Co. contained the following items, among other:
    Cash.....$150,000
    Accounts Receivable...65,000
    Inventory...100,000
    Store Eq(net)...200,000
    Other Assets...50,000
    Mortgage Payable(due in 3years)...140,000
    Note Payable(due in 10 days)...135,000
    Accounts payable...75,000
    Capital Stock...50,000
    Retained Earnings...165,000

    A)From the above information compute:
    1)Current Assets:$__________
    2)Current Liabilities$_________
    3)The current ratio$___________to 1
    4)Working Capital$_____________

    B)Assume that Hart Co. pays the note payable of $135,000, thus reducing cash to $15,000. Compute the following after the completion of this transaction:
    1)The current ration$______________to 1
    2)Working Capital$______________

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    https://brainmass.com/business/working-capital-management/working-capital-18901

    Solution Preview

    Cash $150,000
    Accounts Receivable 65,000
    Inventory 100,000
    Store Eq(net) 200,000
    Total Current Assets: $515,000
    Other Assets 50,000
    $565,000

    Note Payable(due in 10 days)... 135,000
    Accounts payable... 75,000
    Total current liabilities 210,000

    Mortgage Payable(due in 3years)... 140,000

    Capital Stock... 50,000
    Retained Earnings... 165,000
    565,000

    A)rom the ...

    Solution Summary

    Computes Current Assets, Current Liabilities, current ratio, Working Capital

    $2.49

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