Question 8
The following extracts were taken from the books of Teesan Enterprise on 31st October 2010.
Le
Cash in hand 6,750
Stock of raw materials 12,000
Trade debtors 30,000
Plant and Machinery 72,000
Motor Van 31,000
Loan 50,000
Trade creditors 43,000
Calculate:
- Liquid capital
- Fixed assets
- Teesan Enterprises’ capital
- Working capital
You are required to calculate the:
Observation
Many candidates did not attempt this question. Those who attempted the question did not perform well. Teachers are encourage to lay emphases on calculation questions in the class room.
The expected responses are:
8a. Liquid Capital Le
Debtors 30,000
Cash 6,750
36,750
8b. Fixed Assets Le
Plant and Machinery 72,000
Motor Van 31,000
103,000
8c. Teesan Enterprise’s capital
Items Le Le
Cash in hand 6,750
Trade debtors 30,000
Stock of raw materials 12,000
Plant and machinery 72,000
Motor van 31,000 151,750
Less liabilities
Loan 50,000
Trade creditors 43,000 93,000
58,750
8d. Working capital = Current assets less current liabilities
Current Assets Le
Stock of raw materials 12,000
Trade debtors 30,000
Cash in hand 6,750
48,750
Less current liabilities
Creditors 43,000
5,750
ALTERNATIVE
Calculation Le
- Liquid Capital
Debtors 30,000
Cash 6,750
36,750
- Fixed Assets
Plant and Machinery 72,000
Motor Van 31,000
103,000
Statement of affairs as at 31st Oct. 2010
Le Le
Capital 58,750 Fixed Asset
Plant and Machinery 72,000
Motor Van 31,000
Long term Liabilities Current Assets
Loan 50,000 Stock 12,000
Current Liabilities Debtors 30,000
Trade Creditors 43,000 Cash 6,750 48,750
151,750 151,750
Teeson’s Enterpricses Capital
Statement of Affair as at 31st Oct. 2010 =
Assets 151,750
Liabilities 93,000
Capital Le 58,750