Question 18
Final Accounts of a Sole TraderThe following is a draft balance sheet as at 31/12/92 (Cost; Accumulated Depreciation; Net):
Fixed Assets (Tan.): ₦200 000; ₦100 000; ₦100 000
Current Assets:
Stock in trade ₦10 000
Trade debtors ₦4 500
Cash at bank ₦22 800
Cash in hand ₦9 700
Trade creditors ?
Capital ?
Trade creditors account was maintained at 25% of the capital.
What was the balance in the trade creditors account as at 31/12/92?
- A.₦29 800
- B.₦29 500
- C.₦29 400
- D.₦29 000
Show the answer and explanation
Answer: C (₦29 400)
Explanation
Total assets = 100 000 + 10 000 + 4 500 + 22 800 + 9 700 = ₦147 000 = capital + creditors = 1.25 × capital. Capital = ₦117 600, creditors = 25% of it = ₦29 400.