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JAMB Commerce 2022 Question 15

Question 15

Business Calculations

Use the information below to answer questions 15 and 16.
Balance Sheet of LMN 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.(₦6,000,000)
  4. D.(₦11,000,000)
Show the answer and explanation

Answer: C ((₦6,000,000))

Explanation

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