Theory question 106
Business CalculationsCommerce 2 (answer five questions)
The following are the trading figures of Zainab Trading Co. Ltd. for the year ended 31st December 1986:
Creditors N20,000
Premises N20,000
Machinery N20,000
Cash N20,000
Debtors N30,000
Stock N50,000
Cost of goods sold N100,000
Sales N200,000
Plant N30,000
Rent N10,000
From the above, calculate the (a) fixed assets (b) working capital (c) gross profit (d) net profit
Show the model answer
(a) Fixed assets = premises + machinery + plant = 20,000 + 20,000 + 30,000 = N70,000
(b) Current assets = stock + debtors + cash = 50,000 + 30,000 + 20,000 = N100,000; current liabilities = creditors N20,000; working capital = 100,000 − 20,000 = N80,000
(c) Gross profit = sales − cost of goods sold = 200,000 − 100,000 = N100,000
(d) Net profit = gross profit − expenses (rent) = 100,000 − 10,000 = N90,000
Show each formula before substituting the figures.