Question 33
Final Accounts of a Sole TraderUCHENNA ENTERPRISES – Balance Sheet as at 31st December, 1993
Capital N84,000; add net profit N15,000 = N99,000; less drawings N9,000 = N90,000
Creditors N25,000
Accruals N15,000
Total N130,000
Land and Building N45,000
Furniture and Fittings N34,000
Stock N28,000
Debtors N22,000
Cash N1,000
Total N130,000
Capital employed is
- A.N130,000
- B.N115,000
- C.N99,000
- D.N90,000
- E.N84,000.
Show the answer and explanation
Answer: D (N90,000)
Explanation
Capital employed = total assets − current liabilities = N130,000 − N40,000 = N90,000 (the owner's closing capital).