Privett CompanyLine Item DescriptionAmountAccounts payable$27,815Accounts receivable70,978Accrued liabilities6,525Cash22,970Intangible assets43,640Inventory74,446Long-term investments100,209Long-term liabilities78,528Marketable securities34,768Notes payable (short-term)25,264Prepaid expenses2,065Property, plant, and equipment646,687Based on the data for Privett Company, what is the amount of working capital?a. $205,227b. $995,763c. $128,716d. $145,623

The objective of this question is to calculate the working capital of Privett Company. Working capital is a measure of a company's operational liquidity and short-term financial health. It is calculated as the difference between a company's current assets and current liabilities.First, we need to identify the current assets and current liabilities from the given data. Current assets are assets that a company expects to convert to cash or use up within one year. In this case, the current assets include Accounts receivable ($70,978), Cash ($22,970), Inventory ($74,446), Marketable securities ($34,768), and Prepaid expenses ($2,065). Adding these together, the total current assets amount to $205,227.Current liabilities are the company's debts or obligations that are due within one year. In this case, the current liabilities include Accounts payable ($27,815), Accrued liabilities ($6,525), and Notes payable (short-term) ($25,264). Adding these together, the total current liabilities amount to $59,604.Now, we can calculate the working capital by subtracting the total current liabilities from the total current assets. So, the working capital is $205,227 (total current assets) - $59,604 (total current liabilities) = $145,623.The working capital of Privett Company is calculated by subtracting the total current liabilities ($59,604) from the total current assets ($205,227). Therefore, the working capital of Privett Company is $145,623.

Answered: Privett Company Line Item…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Line Item Description	Amount
Accounts payable	$27,815
Accounts receivable	70,978
Accrued liabilities	6,525
Cash	22,970
Intangible assets	43,640
Inventory	74,446
Long-term investments	100,209
Long-term liabilities	78,528
Marketable securities	34,768
Notes payable (short-term)	25,264
Prepaid expenses	2,065
Property, plant, and equipment	646,687