(a) Amatco Ltd has an authorized capital of 6,000,000 ordinary shares of D5.00 per share.
(a) Amatco Ltd has an authorized capital of 6,000,000 ordinary shares of D5.00 per share. It issued 3,000,000 ordinary shares and all such shares were bought and paid for at D2.00 a share except 1,000 shares taken by Mr. Jones. Calculate the value of the: (i) authorized capital (ii) issued capital (iii) called-up capital (iv) paid-up capital.
(b) The following are the assets and liabilities of Morgan's Ltd:
| N | |
| cash | 8,000 |
| Building | 81,000 |
| Creditors | 6,500 |
| sales returns | 12,000 |
| Debtors | 18,000 |
| Capital | 122,000 |
| Overdraft | 11,000 |
| Motor vehicle | 20,000 |
| sales | 50,000 |
| Net profit | 20,000 |
Explanation
(a) (i) Authorized capital D6,000,000 x D5.00 = D30,000,000
(ii) Issued capital D3,000,000 x D5.00 = D15,000,000
(iii) Called up capital D3,000,000 x D2.00 = D6,000,000
(iv) Paid up capital 3,000,000 - 1000 = 2,999,000 x D2.00 D5,998,000
(b) Working Capital = Current Assets - Current Liabilities
(i) Current Assets
Debtors N18,000
CashN8,000
N26,000
Less Current liabilities:
Creditors N 6,500
Overdraft N11,000N17,500
Working Capital= N8,500
(ii)Net sales
Sales N50,000
Less sales return N12,000
N38,000
(iii) Net Profit Percentage
Net Profit 20000 x 100 = 52.6%
Sales 38000
(iv) Fixed Assets
Buildings N31,000
Motor vehicle N20,000
N101,000