Montreal Electronics Has the Following Data Available $\text{\(\underline {Current Liabilities:}\)}$

question 38

Multiple Choice

Montreal Electronics has the following data available:
$\begin{array} { l l l } \text { \(\underline {Current Assets}\) : } & \underline { 2 \times 13 } & \underline { 2 \times 12 } \\\text { Cash } & \$ 150 & \$ 57 \\\text { Accounts Receivable } & 95 & 70 \\\text { Accrued Interest Receivable } & 15 & 15 \\\text { lnventery } & 20 & 60 \\\text { Prepaid Rent } & \underline { 10 } & \overline { - } \\\text { Total Current Assets } & \$ 290 & \$ 202\end{array}$
$\text{\(\underline {Current Liabilities:}\) }$
$\begin{array} { l l l } \text { Accounts Payable } & \$ 90 & \$ 55 \\\text { Accrued Wages Payable } & 24 & 10 \\\text { Accrued Income Taxes Payzble } & 16 & 12 \\\text { Accrued Interest Payable } & 9 & 9 \\\text { Unearned Sales Revenue } & - - & 5 \\\text { Current Portion } & & \\\text { of Long-Term Notes Payable } & \underline { 80 } & \overline { - } \\\text { Total Cument Lizbilities } & \$ 219 & \$ 101\end{array}$
$\text {\(\underline {Long-Term Liabilities:}\) }$
$\begin{array}{lccc}\text { Notes Payable} & 40 & 120\\ \text { Total Liabilities } & \$ 259 & \$ 221 \end{array}$
What is the working capital for Montreal Electronics in 2X13? Has the working capital improved or not improved since 2X12?

• A)$101,not improved
• B)$101,improved
• C)$ 71,improved
• D)$ 71,not improved
• E)$150,not improved

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Definitions:

Depreciation

Methodically dividing the cost of a tangible asset throughout its effective life.

Residual Value

The estimated amount that an asset will be worth at the end of its useful life, after it has been fully depreciated.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly.

Depreciation Expense

Assigning the cost of a solid asset across its useful lifespan.