WAZOBIA Enterprise's financial position as at 31st December, 1996 is as follows: N fixtures 1,000.00
| N | |
| fixtures | 1,000.00 |
| stock 31st december | 8,000.00 |
| Debtors | 5,000.00 |
| Creditors | 3,000.00 |
| Cash in hand | 7,000.00 |
| Bank overdraft | 1,200.00 |
| Typewriter | 4,500.00 |
| furniture | 2,500.00 |
| capital | 8,000.00 |
Calculate:
(a) Capital owned
(b) Working capital
(c) Current liabilities
(d) Fixed capital
(e) Capital employed.
Explanation
(a) Captial owned by WAZOBIA ENTERPRISES:
Capital 18,000
Add Net profit 1,700
Capital owned 19,700
(b) Working capital:
Current assets:
Stock 31st Dec 8,000
Debtors 5,000
Cash in hand 7,000
20,000
Current liabilities:
Creditors 3,000
Bank overdrafts 1,200
One year co-op loan4,100
8,300
Working Capital = Current assets - current liabilities
20,000 - 8,300 = 11,700
(c) Current liabilities;
creditors 3000
Bank overdraft 1,200
corporative loan 4,100
8,300
(d) Fixed assets:
Fixtures 1,000
Typewriter 4,500
Furniture 2,500
8,000
(e) Capital employed:
fixed capital
Fixture 1,000
Typewriter 4,500
Furniture 2,500 8,000
Add current capital;
Stock 31st Dec. 8,000
Debtors 5,000
Cash in hand 7,000 20,000
28,000