Dragon Ltd. is preparing its year-end statement of financial position. The company records show the following selected amounts at the end of the year:

Total assets $530,000

Total non-current assets $362,000

Liabilities:

Notes payable (8%, due in 5 years) $15,000

Accounts payable $56,000

Income taxes payable $14,000

Liability for withholding taxes $3,000

Rent revenue collected in advance $7,000

Bonds payable (due in 15 years) $90,000

Wages payable $7,000

Property taxes payable $3,000

Note payable (10%, due in 6 months) $12,000

Interest payable $400

Common stock $100,000

Required:

Identify current liabilities and compute working capital. Why is working capital important to management?