Answered

Discover answers to your most pressing questions at Westonci.ca, the ultimate Q&A platform that connects you with expert solutions. Discover comprehensive answers to your questions from knowledgeable professionals on our user-friendly platform. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

on December 31, 20--, the following selected accounts and amounts appeared on the balancesheet for Duncan Company. Determine the amount of the working capital and the current ratio.Building $180,000Prepaid Insurance $1,800Merchandise Inventory $85,000Store Equipment $11,000Unearned fees $1,200Notes Payable (due in six months) $6,000Accumulated Depreciation, Building $62,000Accounts payable $25,000Land $50,000Cash $50,000Store Supplies $1,400Accumulated Depreciation, Store Equipment $8,000Notes Receivable (due in four months ) $1,500Mortgage Payanle (current portion) $4,400Salaries Payable $1,600M. Duncan, Capital $161,500Mortgage Payable (due in four years ) 86,000Working capital ______$Current ratio ______$

Sagot :

According to the following situation, the working capital of Duncan company is $ 101,500 and the current ratio of Duncan company is $ 3.66.

What is working capital?

Working capital, often known as net working capital, is the distinction between current assets and current liabilities for a business.

A company's working capital is a gauge of its liquidity and immediate financial stability.

A corporation that has sufficient working capital is able to finance both its ongoing operations and its expansion plans.

Here,

Total of Current assets = Prepaid Insurance + Merchandise Inventory + Cash +  Store Supplies + Notes Receivable

Total of Current assets =  $1,800 + $85,000 + $50,000 + $1,400 + $1,500

Total of Current assets =  $ 139, 700

Total of current liabilities =  Unearned fees + Notes Payable + Mortgage Payable + Accounts payable + Salaries Payable

Total of current liabilities = $1,200 +  $6,000 + $4,400 + $25,000 +  $1,600

Total of current liabilities = $ 38,200

Working capital = Current assets - current liabilities

Working capital = $ 139,700 - $ 38,200

Working capital = $ 101,500.

Current ratio = Current assets / Current liabilities

Current ratio = $ 139,700 / $ 38,200

Current ratio = $ 3.66

Therefore, the the working capital of Duncan company is $ 101,500 and the current ratio of Duncan company is $ 3.66.

To know more about the working capital, visit:

https://brainly.com/question/28391478

#SPJ1

Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. We're glad you chose Westonci.ca. Revisit us for updated answers from our knowledgeable team.