Question

The following amounts were taken from a company's balance sheet:

Total assets, $100,000
Total liabilities, $20,000
Total stockholders' equity, $80,000
Current assets, $10,000
Current liabilities, $5,000
The company's working capital is:________
a) $5,000.
b) $80,000.
c) $10,000.
d) $20,000.

Answer 1

Option a (5000) is the appropriate answer.

Step-by-step explanation:

Given values are:

Current assets,

= $10,000

Current liabilities,

= $5,000

Now,

The working capital will be:

=
`Current \ assets-Current \ liabilities`

By substituting the values, we get

=
`10000-5000`

=
`5000`