You Are Considering Adding a Microbrewery onto One of Your

question 31

Multiple Choice

You are considering adding a microbrewery onto one of your firm's existing restaurants. This will entail an increase in inventory of $8700, an increase in accounts payables of $2300, and an increase in property, plant, and equipment of $48,000. All other accounts will remain unchanged. The change in net working capital resulting from the addition of the microbrewery is ________.

• A) $54,400
• B) $11,000
• C) $7680
• D) $6400

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Definitions:

Perpetual Inventory System

A method of accounting for inventory that records sales and purchases of inventory in real-time through the use of technology, such as barcode scanners.

Merchandise Inventory

Goods that a business holds for the purpose of resale to customers.

Multiple-Step Income Statement

A financial document that breaks down revenue, cost of goods sold, operating expenses, and net income into multiple steps or sections to show a detailed view of a company's financial performance over a specific period.

Administrative Expenses

These are costs related to the general operation of a business that are not directly tied to producing goods or services.