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GCE Financial Accounting 1989 Question 29

Question 29

Company Accounts

Use the following information:
Issued Capital: ₦100,000
Ordinary shares: ₦40,000
Preference shares: ₦30,000
Reserves: ₦10,000
Debentures: ₦60,000
Current Liabilities: ₦150,000
Fixed Assets: ₦90,000
Current Assets: ₦240,000

What is the total of Net Assets of the business?

  1. A.₦200,000
  2. B.₦180,000
  3. C.₦160,000
  4. D.₦150,000
  5. E.₦140,000
Show the answer and explanation

Answer: B (₦180,000)

Explanation

Net assets = fixed assets + current assets − current liabilities = 90,000 + 240,000 − 150,000 = ₦180,000.