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:

Variable Cost

Costs that change in proportion to the level of activity or volume of production, such as materials and labor costs.

Setup Cost

The cost to prepare a machine or process for production.

Clearance Priced

Items sold at a significant discount to clear inventory, often due to overstock or the discontinuation of specific products.