Question 14
Business CalculationsUse the information below to answer questions 14 to 16.
The following are assets and liabilities of Ken's Trading as at December 31, 2025.
Fixed asset - D 10,000
Cash - D 5,000
Stock - D 1,000
Bank overdraft - D 3,000
The value of working capital is
- A.D 3,000
- B.D 4,000
- C.D 5,000
- D.D 6,000
Show the answer and explanation
Answer: A (D 3,000)
Explanation
Working capital = current assets − current liabilities = (5,000 + 1,000) − 3,000 = D3,000.