Final answer:
Ultra Corporation's net working capital is calculated by subtracting total current liabilities, which amount to $14,000, from total current assets, which are $32,000. The resulting net working capital is $18,000. Therefore, the correct answer is B. $18,000.
Step-by-step explanation:
To calculate Ultra Corporation's net working capital, you need to subtract the company's total current liabilities from its total current assets. Net working capital is a measure of a company's short-term financial health and its ability to cover its short-term liabilities with its short-term assets.
First, we calculate the total current assets:
- Cash and marketable securities = $10,000
- Accounts receivable = $2,000
- Inventory = $20,000
Total Current Assets = $10,000 + $2,000 + $20,000 = $32,000
Next, we calculate the total current liabilities:
- Accrued wages and taxes = $1,000
- Accounts payable = $3,000
- Notes payable = $10,000
Total Current Liabilities = $1,000 + $3,000 + $10,000 = $14,000
Now, subtract total current liabilities from total current assets to find Ultra's net working capital:
Net Working Capital = Total Current Assets - Total Current Liabilities
Net Working Capital = $32,000 - $14,000 = $18,000
The correct answer is B. $18,000, which is Ultra Corporation's net working capital.