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From the following balances for Alpha Inc., calculate the working capital of the company.

\begin{tabular}{|l|r|}
\hline \multicolumn{1}{|c|}{ Items } & Amount (\[tex]$) \\
\hline Accounts payable & 50,000 \\
\hline Inventory & 80,000 \\
\hline Tax payable & 10,000 \\
\hline Cash at bank & 80,000 \\
\hline Prepaid rent & 2,000 \\
\hline
\end{tabular}

A. $[/tex]\[tex]$ 62,000$[/tex]
B. [tex]$\$[/tex] 102,000[tex]$
C. $[/tex]\[tex]$ 60,000$[/tex]
D. [tex]$\$[/tex] 222,000$



Answer :

GinnyAnswer
To calculate the working capital for Alpha Inc., we need to follow these steps:

1. Calculate the current assets of the company.
Current assets include:
- Inventory: [tex]$80,000 - Cash at bank: $[/tex]80,000
- Prepaid rent: [tex]$2,000 Adding these amounts together gives: \[ \text{Current Assets} = 80,000 + 80,000 + 2,000 = 162,000 \] 2. Calculate the current liabilities of the company. Current liabilities include: - Accounts payable: $[/tex]50,000
- Tax payable: [tex]$10,000 Adding these amounts together gives: \[ \text{Current Liabilities} = 50,000 + 10,000 = 60,000 \] 3. Calculate the working capital by subtracting the current liabilities from the current assets: \[ \text{Working Capital} = \text{Current Assets} - \text{Current Liabilities} = 162,000 - 60,000 = 102,000 \] Thus, the working capital of Alpha Inc. is $[/tex]102,000.

The correct answer is:
B. \$ 102,000

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