Question

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

Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
	Year 2			Year 1
Assets
Current assets:
Cash	$	162		$	122
Accounts receivable, net		225			245
Inventory		122			132
Prepaid expenses		41			41
Total current assets		550			540
Plant and equipment, net		710			710
Total assets	$	1,260		$	1,250
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	132		$	152
Accrued liabilities		91			91
Notes payable, short term		61			71
Total current liabilities		284			314
Bonds payable		283			293
Total liabilities		567			607
Stockholders' equity:
Common stock, $2 par value		102			102
Additional paid-in capital		205			205
Retained earnings		386			336
Total stockholders' equity		693			643
Total liabilities & stockholders' equity	$	1,260		$	1,250

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)	$	1,350
Cost of goods sold		800
Gross margin		550
Selling and administrative expenses		364
Net operating income		186
Interest expense		37
Net income before taxes		149
Income taxes (30%)		45
Net income	$	104

The working capital at the end of Year 2 is:

Multiple Choice

• $266 thousand

• $692 thousand

• $710 thousand

• $550 thousand