Use the following information to answer this question. The following is a summary of the asset and liabilities of Ojo trading company as at 31st December, 2...
Use the following information to answer this question.
The following is a summary of the asset and liabilities of Ojo trading company as at 31st December, 2018
Initial Capital
5000
Net Profit
1000
Furniture
2000
Equipment
2900
Debtors
100
Stock
1000
Bank
500
From the above, calculate Current assets
Answer Details
To calculate the current assets of Ojo Trading Company, we need to add up all the assets that are expected to be converted into cash within one year. These include:
- Debtors: The amount of money that the company is owed by its customers within one year.
- Stock: The value of the goods that the company currently holds in inventory that are expected to be sold within one year.
- Bank: The amount of cash that the company has in its bank accounts.
Adding these up, we get:
Current assets = Debtors + Stock + Bank
= 100 + 1000 + 500
= 1600
Therefore, the current assets of Ojo Trading Company as at 31st December, 2018 is 1600.
In summary, current assets are those assets that are expected to be converted into cash within one year. For Ojo Trading Company, the current assets include debtors, stock and bank, which when added together, give a total of 1600.