How are financial statements used by bJoe Fellows is attempting to categorize several items from his company’sfinancial statements so he can determine his working capital. Joenotices the following categories of accounts and amounts: cash, $3,500;accounts payable, $10,200; accounts receivable, $15,000; sales taxesdue the city of Phoenix, $750; sales taxes due the Arizona Departmentof Revenue, $3,450; inventory, $17,500; wages payable, $5,350; taxespayable (federal), $2,570; 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?usiness?
How are financial statements used by bJoe 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), $2,570; 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?usiness?
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