Question

Luther Corporation

Consolidated Balance Sheet
December 31, 2006 and 2005 (in $ millions)
Assets Liabilities and Stockholders' Equity
2006 2005 2006 2005
Current Assets Current Liabilities
Cash 63.6 58.5 Accounts payable 87.6 73.5
Accounts receivable55.5 39.6 Notes payable 10.5 9.6
sort term debt
Inventories 45.9 42.9 Current maturities of 39.9 36.9
long-term debt
Other current assets6.0 3.0 Other current liabilities 6.0 12.0
Total current assets 171.0 144.0 Total current liabilities 144.0 132.0
Long-Term Assets Long-Term Liabilities
Land 66.6 62.1 Long-term debt 239.7 168.9
Buildings 109.5 91.5 Capital lease 0 0
obligations------
Equipment 119.1 99.6 Total Debt 239.7 168.9
Less accumulated(56.1) (52.5) Deferred taxes 22.8 22.2
depreciation
Net property, plant, 239.1 200.7 Other long-term liabilities ------
and equipment
Goodwill 60.0 -- Total long-term liabilities 262.5 191.1
Other long-term 63.0 42.0 Total liabilities 406.5 323.1
assets
Total long-term assets362.1 242.7 Stockholders' Equity 126.6 63.6
Total Assets 533.1 386.7 Total liabilities and 533.1 386.720
Stockholders' Equity
Refer to the balance sheet above.What is Luther's net working capital in 2005?
A) $12 million
B) $27 million
C) $39 million
D) $63.6 million

Answer 1

A) $12 million

Step-by-step explanation:

The computation of the working capital for the year 2005 is as follows:

As we know that

Working capital is

= Current assets - current liabilities

= $144 million - $132 million

= $12 million

Hence, the working capital for the year 2005 is $12 million

So the correct option is A

The same is to be considered