Given: Authorized Capital: N 100,000 ordinary shares of ₦1 eash Issued and fully paid: 50,000 ordinary shares of ₦1 each 50,000 10, 000 8% perference shares...
Question 1 Report
Given:
Authorized Capital: N
100,000 ordinary shares of ₦1 eash
Issued and fully paid:
50,000 ordinary shares of ₦1 each 50,000
10, 000 8% perference shares
Of ₦1 each
Reserves 10,000
Creditors 25,000
Debtors 13 000
Cash in hand 5000
Determine the net current assets
Answer Details
To determine the net current assets, we need to find the current assets and current liabilities of the company and then subtract the current liabilities from current assets.
Current Assets = Debtors + Cash in Hand = ₦13,000 + ₦5,000 = ₦18,000
Current Liabilities = Creditors = ₦25,000
Net Current Assets = Current Assets - Current Liabilities = ₦18,000 - ₦25,000 = -₦7,000
Since the result is negative, it means the company has a deficit in net current assets, which implies that the company may face difficulties in meeting its short-term obligations. Therefore, the correct option is ₦3,000 (None of the above).
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