Question 20
Business CalculationsUse the information below to answer questions 19 and 20.
Bola's Balance Sheet as at 31st December, 2006
Capital ₦10,000 | Land and building ₦12,000
Drawings ₦600 | Fittings ₦850
(9,400) | Motor vans ₦1,600
Profit ₦6,200 | Cash ₦2,150
(15,600) | Prepayments ₦700
Creditors ₦1,800 | Debtors ₦100
Total ₦17,400 | Total ₦17,400
10% is charged on depreciation of fixed assets.
What is Bola's working capital?
- A.₦2,150
- B.₦1,150
- C.₦1,950
- D.₦1,800
Show the answer and explanation
Answer: B (₦1,150)
Explanation
Current assets = cash 2,150 + prepayments 700 + debtors 100 = ₦2,950. Working capital = 2,950 − creditors 1,800 = ₦1,150.