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WAEC Financial Accounting 2013 Question 11

Question 11

Interpretation of Accounts

Use the following information to answer questions 10 to 12.
Net profit: ₦60,000
Total assets: ₦520,000
Current liabilities: ₦150,000
Current assets: ₦280,000
The capital employed is

  1. A.₦740,000.
  2. B.₦580,000.
  3. C.₦370,000.
  4. D.₦280,000.
Show the answer and explanation

Answer: C (₦370,000.)

Explanation

Capital employed = total assets − current liabilities = 520,000 − 150,000 = ₦370,000.