Assume the Following Information from the Financial Statements of ReStateM

question 33

Multiple Choice

Assume the following information from the financial statements of ReStateM Company:
Net income $10,000
Depreciation expense $3,000
Salaries expense $5,000
Deferred income taxes $2,000
Change in accounts receivable $4,000
Change in accounts payable -$5,000
Change in inventory -$2,000
Capital expenditures $4,000
The change in net working capital for ReStateM Company is:

• A)Increase $7,000
• B)Decrease $7,000
• C)Increase $2,000
• D)Decrease $2,000

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Definitions:

Land Account

An account in the ledger that records the costs and values related to ownership of land.

Future Bond Issue

A planned issuance of bonds by a corporation or government in the future to raise capital.

Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Treasury Stock

Shares of a company's own stock held by the company itself, often bought back from shareholders and not considered when calculating earnings per share or dividends.