Freiman Corporation's most recent balance sheet and income statement appear below:

Yr 1 Yr 2

Balance sheet

Current assets

Cash 160 120

Account receivable 220 240

Inventory 120 130

Prepaid expenses 40 40

Total current assets 540 530

Plant and equip, net 700 700

Total assets 1,240 1,230

Liabilites and stockholders equilty

Current liabilities

Accounts payable 130 150

Accrued liabilities 90 90

Notes payable, short term 60 70

Total current liabilities 280 310

Bond payable 280 290

Total liabilities 560 600

Stockholders equity

Common stock, $2 par value 100 100

Additional paid-in capital common stock 200 200

Retained earnings 380 330

Total stockholders equity 680 630

Total liabilities & stockholders equity 1,240 1,230

Income Statement

Sales (all on account) 1,130

Costs of goods sold 780

Gross margin 530

Selling and admin exp 359

Net operating income 171

Interest expense 35

Net income before taxes 136

Income taxes (30%) 41

Net income 95

The working capital at the end of Year 2 is:

	a)	$260 thousand
	b)	$680 thousand
	c)	$700 thousand
	d)	$540 thousand