Theory question 108
Business CalculationsManka Ltd. had an authorized capital of 100,000 shares of D 40 each, out of which 50,000 shares were fully subscribed and allotted as at December 31, 2024. Other assets and liabilities were:
D
Creditors 40,000
Motor van 100,000
Buildings 500,000
Stock 40,000
Debtors 15,000
Cash 10,000
You are required to calculate: (a) issued capital; (b) unissued capital; (c) total assets; (d) working capital.
Show the model answer
Model answer
(a) Issued capital = 50,000 × D40 = D2,000,000
(b) Unissued capital = (100,000 − 50,000) × D40 = D2,000,000
(c) Total assets = 100,000 + 500,000 + 40,000 + 15,000 + 10,000 = D665,000
(d) Current assets = 40,000 + 15,000 + 10,000 = D65,000
Working capital = 65,000 − 40,000 (creditors) = D25,000
Explanation
Issued and unissued capital use the D40 nominal value of each share.