Question 5
Interpretation of AccountsUse the information below to answer questions 5 and 6.
Udoh Trading Company Balance Sheet as at 31st December, 1992 (shown in the figure).
What is the working capital?
- A.₦11 000
- B.₦8 000
- C.₦4 000
- D.₦12 000
Show the answer and explanation
Answer: C (₦4 000)
Explanation
Current assets = stock 4,000 + debtors 6,000 + cash 8,000 = ₦18,000. Current liabilities = creditors 9,000 + accrued wages 5,000 = ₦14,000. Working capital = ₦4,000.