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GCE Financial Accounting 1989 Question 31

Question 31

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 the loan capital of the business?

  1. A.₦10,000
  2. B.₦30,000
  3. C.₦40,000
  4. D.₦60,000
  5. E.₦70,000
Show the answer and explanation

Answer: D (₦60,000)

Explanation

Loan capital is the long-term borrowing, here the debentures of ₦60,000.