Theory question 108
Business CalculationsBonto Limited has the following assets and liabilities as at 01/01/2024
₦
Stock 200,000
Fixtures 350,000
Debtors 200,000
Overdraft 50,000
Motor vehicles 800,000
Cash 40,000
Creditors 20,000
Bank 70,000
Calculate the following: (i) total fixed assets; (ii) total current assets; (iii) total liabilities; (iv) working capital; (v) capital employed
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(i) Fixed assets = fixtures 350,000 + motor vehicles 800,000 = ₦1,150,000
(ii) Current assets = stock 200,000 + debtors 200,000 + cash 40,000 + bank 70,000 = ₦510,000
(iii) Total liabilities = overdraft 50,000 + creditors 20,000 = ₦70,000
(iv) Working capital = 510,000 − 70,000 = ₦440,000
(v) Capital employed = fixed assets + working capital = 1,150,000 + 440,000 = ₦1,590,000 (if taken as total assets: 1,150,000 + 510,000 = ₦1,660,000)
Bank (a positive balance) is a current asset; the overdraft is a liability.