4Q- 55 Assume U.S. GAAP The following information was available from the accounting records of a company as at December 31, 2007: Accounts payable $20,000 Accounts receivable 82,000 Bank loan, due on demand 44,000 Cash 12,500 Income taxes payable 5,000 Inventory 47,400 Investments accounted for by the equity method 112,000 Loan payable, due June 30, 2009 50,000 Deposits from customers for deliveries in 2008 8,000 The working capital for the company is closest to: 4Q- A. $14,900. 4Q- B. $64,900. 4Q- C. $72,900. 4Q- D. $176,900. ------------------------------------------- my answer B working capital=CA-CL=-20000+82000-44000+12500-5000+47400-8000 the Loan payable, due June 30, 2009 is over one year, not a CL.not sure if Investments accounted for by the equity method is CA.
map1 Wrote: ------------------------------------------------------- > Check this out: > > http://beginnersinvest.about.com/cs/investinglesso > ns/l/blmininterest.htm ---------------------------------------- good site. it is more about income statement. I remember the investment is FA, normally. not a CA.
you’ll learn the equity method in level 2. it is an intercorporate investment, and not working capital.