Theory question 110
Business CalculationsCommerce 2 (essay)
Ade Company Limited has an authorized capital of 80,000 shares of ₦20 each, out of which 30,000 shares have been fully subscribed by the public and allotted as at 31st March 2006. Other assets and liabilities were (₦):
Creditors – 35,000
Motor van – 90,000
Buildings – 65,000
Stock – 60,000
Debtors – 15,000
Cash – 5,000
You are required to calculate:
(a) Issued capital;
(b) Unissued capital;
(c) Total Assets;
(d) Working capital.
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(a) Issued capital = 30,000 × ₦20 = ₦600,000.
(b) Authorised capital = 80,000 × ₦20 = ₦1,600,000; unissued capital = 1,600,000 − 600,000 = ₦1,000,000 (50,000 shares × ₦20).
(c) Total assets = motor van 90,000 + buildings 65,000 + stock 60,000 + debtors 15,000 + cash 5,000 = ₦235,000.
(d) Current assets = 60,000 + 15,000 + 5,000 = ₦80,000; working capital = 80,000 − creditors 35,000 = ₦45,000.
Creditors are a liability, so leave them out of total assets.