The following is a summary of the assets and liabilities of Odika Enterprises for the year ended December 31st 2000. N motor vehicle 60,000 fixtures & fitti...
Question 1 Report
| N | |
| motor vehicle | 60,000 |
| fixtures & fittings | 60,000 |
| machinery | 65,000 |
| warehouse | 18,000 |
| stock | 20,000 |
| prepayment | 10,000 |
| Accrued expenses | 12,000 |
| cash-in-hand | 8,000 |
| cash at bank | 6,000 |
| bank overdraft | 3,500 |
| creditors | 5,000 |
| Debtors | 6,000 |
| premises | 75,000 |
(a) From the above figures, calculate the following, showing all workings:
(i) capital owned
(ii) fixed assets
(iii) working capital.
(b) List five sources of capital available to a public limited company.
Answer Details
Odika Enterprises - year ended 31st December 2000
| Item | N | Classification |
|---|---|---|
| Premises | 75,000 | Fixed asset |
| Machinery | 65,000 | Fixed asset |
| Motor vehicle | 60,000 | Fixed asset |
| Fixtures & fittings | 60,000 | Fixed asset |
| Warehouse | 18,000 | Fixed asset |
| Stock | 20,000 | Current asset |
| Prepayment | 10,000 | Current asset |
| Cash-in-hand | 8,000 | Current asset |
| Cash at bank | 6,000 | Current asset |
| Debtors | 6,000 | Current asset |
| Accrued expenses | 12,000 | Current liability |
| Creditors | 5,000 | Current liability |
| Bank overdraft | 3,500 | Current liability |
Fixed assets = 75,000 + 65,000 + 60,000 + 60,000 + 18,000 = N278,000
Current assets = 20,000 + 10,000 + 8,000 + 6,000 + 6,000 = N50,000
Current liabilities = 12,000 + 5,000 + 3,500 = N20,500
(a)(i) Capital owned = Total assets - External liabilities
= (278,000 + 50,000) - 20,500 = 328,000 - 20,500 = N307,500
(a)(ii) Fixed assets = N278,000
(a)(iii) Working capital = Current assets - Current liabilities
= 50,000 - 20,500 = N29,500
(b) Five sources of capital available to a public limited company
- Issue of ordinary (equity) shares
- Issue of preference shares
- Issue of debentures
- Long-term loans from banks and financial institutions
- Ploughed-back (retained) profits and reserves
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