Theory question 110
Business CalculationsCommerce 2 (essay)
Deslie Cobola, a businessman has the following assets and liabilities as at 01/01/07 (Le):
Stock – 120,000
Fixtures – 335,000
Debtors – 111,000
Overdraft – 27,000
Machinery – 348,000
Motor vehicles – 232,000
Cash – 82,000
Creditors – 101,000
From the above information calculate the following:
(a) Total fixed assets;
(b) Total current assets;
(c) Total current liabilities;
(d) The working capital;
(e) The capital employed.
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(a) Fixed assets = fixtures 335,000 + machinery 348,000 + motor vehicles 232,000 = Le 915,000.
(b) Current assets = stock 120,000 + debtors 111,000 + cash 82,000 = Le 313,000.
(c) Current liabilities = overdraft 27,000 + creditors 101,000 = Le 128,000.
(d) Working capital = 313,000 − 128,000 = Le 185,000.
(e) Capital employed = fixed assets + working capital = 915,000 + 185,000 = Le 1,100,000 (equal to total assets 1,228,000 − current liabilities 128,000).
Bank overdraft is a current liability.