(a) Amatco Ltd has an authorized capital of 6,000,000 ordinary shares of D5.00 per share. It issued 3,000,000 ordinary shares and all such shares were bough...

Answer Details

(a) Amatco Ltd

Authorized capital: 6,000,000 ordinary shares of D5.00 each (nominal value D5.00). Issued: 3,000,000 shares. Amount called and paid: D2.00 per share, except 1,000 shares taken by Mr. Jones who has not paid.

(i) Authorized capital = Number of authorized shares x nominal value

= 6,000,000 x D5.00 = D30,000,000

(ii) Issued capital = Shares issued x nominal value

= 3,000,000 x D5.00 = D15,000,000

(iii) Called-up capital = Issued shares x amount called per share

= 3,000,000 x D2.00 = D6,000,000

(iv) Paid-up capital = Called-up capital - Calls in arrears

Calls in arrears (Mr. Jones) = 1,000 x D2.00 = D2,000

= 6,000,000 - 2,000 = D5,998,000

(b) Morgan's Ltd - assets and liabilities

No specific requirement was stated for this part, so the items are classified below and the derivable figures shown. Sales (50,000), sales returns (12,000) and net profit (20,000) are trading/profit items rather than balance-sheet assets or liabilities.

Fixed assets = 81,000 + 20,000 = N101,000

Current assets = 18,000 + 8,000 = N26,000

Current liabilities = 6,500 + 11,000 = N17,500

Working capital = 26,000 - 17,500 = N8,500