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Question

Read the following information to answer the below questions:   Net Sales = 40,00,000 (20 % GP Element) out of which 40% is on credit. Opening Inventories were 60 % of closing inventories. Opening Receivables are 120,000.   

Calculate net working capital?

A 4,76,000 Correct Answer Incorrect Answer
B 4,34,000 Correct Answer Incorrect Answer
C 4,61,000 Correct Answer Incorrect Answer
D 4,64,000 Correct Answer Incorrect Answer

Solution

Current Assets – Current Liabilities 7,84,000 - 3,50,000 =4,34,000 Current Assets = Stock + Debtors + Cash = 420,000+340,000+24000 = 7,84,000 Current Liability = Trade Creditors + Bank Overdraft + Short term borrowings = 200,000+1,20,000+30,000 =3,50,000

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