Question 16
Final Accounts of a Sole TraderUse the following information:
Goodwill: Dr ₦10,000
Plant and Machinery: Dr ₦32,000
Freehold premises: Dr ₦50,000
Stock: Dr ₦15,000
Debtors: Dr ₦12,500
Cash in bank: Dr ₦7,500
Cash in hand: Dr ₦2,000
Profit and Loss Account: Cr ₦34,000
Accrued rent: Cr ₦500
Sundry creditors: Cr ₦9,500
Capital: Cr (figure not given)
Totals: ₦129,000, ₦129,000
The capital is
- A.₦92,000
- B.₦89,500
- C.₦85,000
- D.₦82,000
- E.₦60,000
Show the answer and explanation
Answer: C (₦85,000)
Explanation
Capital is the missing credit: 129,000 − (34,000 + 500 + 9,500) = ₦85,000.