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JAMB Principles of Accounts 1995 Question 39

Question 39

Company Accounts

Yakubu (Nigeria) Limited (Extract) Balance Sheet as at 31st December, 1993. (Authorized ₦; Issued ₦)
Ordinary shares: ₦100 000; ₦80 000
10% preference shares: ₦30 000; ₦20 000
Share premium ₦20 000
Profit and loss A/C ₦13 000
Trade creditors ₦30 000
Accruals ₦5 000
Stock ₦10 000
Debtors ₦40 000
Bank ₦25 000
Equity shareholders' fund is

  1. A.₦133 000
  2. B.₦120 000
  3. C.₦113 000
  4. D.₦100 000
Show the answer and explanation

Answer: C (₦113 000)

Explanation

Equity shareholders' fund = ordinary share capital 80 000 + share premium 20 000 + profit and loss 13 000 = ₦113 000. Preference shares are not equity.