Desola cobola, a business man has the following... | WAEC SSCE - Commerce - 2011 (Essay)

Question 1 Report

Desola cobola, a business man has the following assets and liabilities as at 01/01/07
	Le
stock	120,000
fixtures	335,000
Debtors	111,000
Overdraft	27,000
machinery	348,000
motor vehicles	232,000
cash	82,000
creditors	101,000

From the above information, calculate the following:
(a) Total fixed assets
(b) Total current assets
(c) Total current liabilities
(d) The working capital
(e) The capital employed

Answer

Desola Cobola as at 01/01/07

Item	Le	Classification
Fixtures	335,000	Fixed asset
Machinery	348,000	Fixed asset
Motor vehicles	232,000	Fixed asset
Stock	120,000	Current asset
Debtors	111,000	Current asset
Cash	82,000	Current asset
Overdraft	27,000	Current liability
Creditors	101,000	Current liability

(a) Total fixed assets = Fixtures + Machinery + Motor vehicles

= 335,000 + 348,000 + 232,000 = Le915,000

(b) Total current assets = Stock + Debtors + Cash

= 120,000 + 111,000 + 82,000 = Le313,000

(c) Total current liabilities = Overdraft + Creditors

= 27,000 + 101,000 = Le128,000

(d) Working capital = Current assets - Current liabilities

= 313,000 - 128,000 = Le185,000

(e) Capital employed = Fixed assets + Working capital

= 915,000 + 185,000 = Le1,100,000

(Check: Total assets - Current liabilities = 1,228,000 - 128,000 = Le1,100,000.)

Read lesson note on Commerce (JAMB)

Answer Details

Desola Cobola as at 01/01/07

Item	Le	Classification
Fixtures	335,000	Fixed asset
Machinery	348,000	Fixed asset
Motor vehicles	232,000	Fixed asset
Stock	120,000	Current asset
Debtors	111,000	Current asset
Cash	82,000	Current asset
Overdraft	27,000	Current liability
Creditors	101,000	Current liability