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Question
The accounts of Weston Inc. indicate the following changes in long-term assets and capital for the past year:
(1) Fifty thousand (50,000) shares of common stock were sold at $25 per share.
(2) Two million dollars ($2 million) in bonds matured and were retired.
(3) Dividends of $1 million were paid.
(4) Net fixed assets declined by $200,000.
(5) Net income was calculated to be $2 million.
(6) Depreciation expense was $1.5 million.
What was the increase or decrease in net working capital? (Hint: Changes in net fixed assets incorporate changes in both gross fixed assets and accumulated depreciation.)
a. +$450,000
b. u2212$250,000
c. u2212$1,950,000
d. +$1,950,000
e. +$3,300,000
Answer
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