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JAMB Principles of Accounts 1997 Question 45

Question 45

Interpretation of Accounts

Use the information below to answer questions 45 and 46.
Udoh Trading Company Balance Sheet as at 31st December, 1992
Capital ₦39 000
Long term loan ₦15 000
Creditors ₦9 000
Accrued wages ₦5 000
Total ₦68 000
Land ₦20 000
Building ₦30 000
Stock ₦4 000
Debtors ₦6 000
Cash ₦8 000
Total ₦68 000
What is the working capital?

  1. A.₦12 000
  2. B.₦11 000
  3. C.₦8 000
  4. D.₦4 000.
Show the answer and explanation

Answer: D (₦4 000.)

Explanation

Current assets = 4 000 + 6 000 + 8 000 = 18 000. Current liabilities = 9 000 + 5 000 = 14 000. Working capital = ₦4 000.