The Miami office balance sheet lists $1,596,000 in current assets and $1,129,000 in current liabilities. What working capital is available?
Correct Answer
B) $467,000
Working capital is current assets minus current liabilities.
Why This Is the Correct Answer
Working capital is current assets minus current liabilities.
Why the Other Options Are Wrong
Option A: $443,000
$443,000 is below the supported result for working capital; it likely uses the wrong base, period, or account bucket.
Option C: $485,000
$485,000 is above the supported result for working capital; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $2,725,000
$2,725,000 is above the supported result for working capital; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Bonding Agent money test: bucket before math for working capital.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Three, Financial Ratios, Balance Sheet Ratios; use the job ledger figures in the stem and recompute the same accounting measure.
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