Question

Prezas Company's balance sheet showed total current assets of $3,250, all of which were required in operations. Its current liabilities consisted of $975 of accounts payable, $600 of 6% short-term notes payable to the bank, and $250 of accrued wages and taxes. What was its net operating working capital

Answer 1

$1,425

Step-by-step explanation:

Net operating working capital (NOWC) is the excess of operating current assets over operating current liabilities.

Prezas Company's balance sheet showed total current assets of $3,250, all of which were required in operations.

Its current liabilities consisted of $975 of accounts payable, $600 of 6% short-term notes payable to the bank, and $250 of accrued wages and taxes.

its net operating working capital = $3,250 - ($975+$600+$250) = $1,425