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JAMB Commerce 2021 Question 14

Question 14

Business Calculations

Use the information below to answer questions 13 and 14.
A B C Balance Sheet as at 31/12/2004
Share capital ₦200,000 | Fixed assets ₦180,000
Reserves ₦100,000 | Investment ₦100,000
Long term liabilities ₦40,000 | Current assets ₦50,000
Current liabilities ₦30,000 | Fictitious assets ₦40,000
Total ₦370,000 | Total ₦370,000

What is the capital employed?

  1. A.₦340,000
  2. B.₦200,000
  3. C.₦300,000
  4. D.₦170,000
Show the answer and explanation

Answer: C (₦300,000)

Explanation

Capital employed = share capital + reserves = ₦200,000 + ₦100,000 = ₦300,000 (the same as total real assets ₦330,000 less current liabilities ₦30,000).