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JAMB Principles of Accounts 2007 Question 15

Question 15

Interpretation of Accounts

Given:
Shaku Company Ltd.
Stock ₦3 600 000
Cash at hand ₦800 000
Cash in bank ₦2 400 000
Debtors ₦580 000
Trade creditors ₦920 000
Bank overdraft ₦200 000
Tax liabilities ₦600 000
Salary owed to staff ₦180 000
Determine the working capital.

  1. A.₦7 380 000
  2. B.₦8 480 000
  3. C.₦5 480 000
  4. D.₦6 480 000.
Show the answer and explanation

Answer: C (₦5 480 000)

Explanation

Current assets = 3 600 000 + 800 000 + 2 400 000 + 580 000 = ₦7 380 000. Current liabilities = 920 000 + 200 000 + 600 000 + 180 000 = ₦1 900 000. Working capital = ₦5 480 000.