The Financial Statements for Uptown Service Company Include the Following

question 75

Multiple Choice

The financial statements for Uptown Service Company include the following items: $\begin{array}{lrr}&2019&2018\\\text { Cash } & \$ 50,500 & \$ 40,000 \\\text { Short-term Investments } & 32,000 & 11,000 \\\text { Net Accounts Receivable } & 52,000 & 55,000 \\\text { Merchandise Inventory } & 157,000 & 49,000 \\\text { Total Assets } & 531,000 & 554,000 \\\text { Accounts Payable } & 124,500 & 124,000 \\\text { Salaries Payable } & 16,000 & 18,000 \\\text { Long-term Note Payable } & 56,000 & 52,000\end{array}$
Compute working capital for 2019.

• A) $135,000
• B) $95,000
• C) $151,000
• D) $31,000

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Definitions:

Illusory Promise

A promise that does not obligate the promisor to anything.

Legally Enforceable Promise

A commitment or agreement that is recognized by law and can be upheld in a court of justice.

Release

In contract law, a promise made by one party agreeing not to sue a second party.

Legally Sufficient Consideration

Value that the law recognizes as adequate to form a binding contract, typically involving an exchange of goods, services, or promises.