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JAMB Commerce 2001 Question 13

Question 13

Business Calculations

Use the balance sheet below to answer questions 13 and 14.
Mama Trading Company
Liabilities (₦): Capital 140; Opening capital 350; Add Net profit 80; Current liabilities 800; Total 1,370
Assets (₦): Fixed 1000; Current: Debt 200, Stock 70, Bank 50, Cash 50; Total 1,370
The capital employed is

  1. A.₦1,000
  2. B.₦1,370
  3. C.₦140
  4. D.₦50.
Show the answer and explanation

Answer: B (₦1,370)

Explanation

Capital employed (gross) is the total of all assets used in the business: 1,000 + 200 + 70 + 50 + 50 = ₦1,370.