Saginaw Corporation reported the following current accounts at December 31, 2018 (amounts in thousands): Cash.................................................... $1,400 Receivables...........................................

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Saginaw Corporation reported the following current accounts at December 31, 2018 (amounts in thousands):

Cash.................................................... $1,400
Receivables........................................... 5,200
Inventory............................................... 2,400
Prepaid expenses ............................... 1,400
Accounts payable ................................ 2,400
Unearned revenue............................... 1,300
Accrued expenses payable ................ 2,000


During January 2019, Saginaw completed these selected transactions:
■ Sold services on account, $9,400
■ Depreciation expense, $200
■ Paid for expenses, $7,400
■ Collected from customers on account, $7,800
■ Accrued expenses, $300
■ Paid on account, $1,100
■ Used up prepaid expenses, $1,000

Calculate Saginaw’s net working capital and current ratio at December 31, 2018, and again at January 31, 2019. Did the net working capital and current ratio improve or deteriorate during January 2019? Comment on the level of the company’s net working capital and current ratio.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Financial Accounting

ISBN: 978-0134725987

12th edition

Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

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