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JAMB Commerce 2007 Question 48

Question 48

Business Calculations

Balance Sheet of XYZ as at 31/12/2003
Ordinary share capital ₦25 000 000 | Fixed assets ₦26 000 000
Revenue reserve ₦10 000 000 | Investment ₦22 000 000
General reserve ₦3 000 000 | Current assets ₦5 000 000
Long-term liabilities ₦4 000 000
Current liabilities ₦11 000 000
Total ₦53 000 000 | Total ₦53 000 000
What is the net working capital?

  1. A.₦6 000 000
  2. B.₦16 000 000
  3. C.(₦11 000 000)
  4. D.(₦6 000 000)
Show the answer and explanation

Answer: D ((₦6 000 000))

Explanation

Working capital = current assets − current liabilities = 5 000 000 − 11 000 000 = −₦6 000 000, shown in brackets.