Question

The December 31, 2018, balance sheet of Justin’s Golf Shop, Inc., showed current assets of $1,490 and current liabilities of $1,210. The December 31, 2019, balance sheet showed current assets of $1,675 and current liabilities of $1,290. What was the company’s 2019 change in net working capital, or NWC? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Answer 1

Answer:

$105

Explanation:

Calculation to determine change in net working capital, or NWC

First step is to calculate the Change in current assets

Change in current assets = 1,675 - 1,490

Change in current assets= 185

Second step is to calculate the Change in current Liabilities

Change in current liabilities = 1,290 - 1,210

Change in current liabilities= 80

Now let calculate the Change in net working capital

Using this formula

Change in net working capital = Change in current assets - Change in current liabilities

Let plug in the formula

Change in net working capital = 185 - 80

Change in net working capital =$105

Therefore change in net working capital, or NWC is $105