Use the Following Data to Calculate Working Capital A)$1600
B)$2300
C)$2500
D)$2900

question 8

Multiple Choice

Use the following data to calculate working capital. . $\begin{array} {c } \text { Drew's Lawn Service}\\ \text { Balance Sheet }\\ \text { December 31,2022 }\\\begin{array}{lr}\text { Cash } & \$ 2,000 \\\text { Accounts receivable } & 300 \\\text { Supplies } & 100 \\\text { Prepaid insurance } & 900\\ \text {Equipment }&\$33,000\\ \text { Less: Accumulated }\\ \text {depreciation }(6,000) &27,000\\ \text { Internet domain}&1,000\\ \text {Total assets }&\$31,300\\\end{array}&\begin{array}{lr}\text { Accounts payable } & \$ 600 \\\text { Salaries and wages payable } & 200 \\\text { Note payable (due 2024) } & 22,100 \\\text { Total liabilities } & 22,900 \\\text { Common stock } & 7,000 \\\text { Retained earnings } & 1,400 \\\text { Total stockholders' equity } & \underline{8,400}\\ \text {Total liabilities and }\\ \text { stockholders' equity}&\$31,300\\\end{array}\end{array}$

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Definitions:

Price Stability

An economic condition in which prices in the economy do not change drastically over time, minimizing inflation and deflation to promote predictable economic planning.

Purchasing Value

The worth of goods or services that can be bought with a specified amount of currency.

Spot Exchange Rates

Refers to the current exchange rate at which currencies can be traded immediately or on the spot.

Overvalued Currency

A currency whose value is higher than its actual demand or economic fundamentals justify.