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WAEC Accounting 2012 Paper

Question : 46

Total: 47

\text{N N}

\begin{array}{ll}\text{---}\;\text{Capital} & 40,000 \\ \text{Freehold premises} & 50,000\end{array}

\text{Less: Net loss}\;\frac{5,000}{35,000}\;\text{Stock}\;3,000

\begin{matrix} \;\text{Less: Drawings}\; & \;\frac{2,000}{33,000} & \;\text{Debtors}\; & 4,000 \end{matrix}

\begin{array}{c c c c} \;\text{Long term loan}\; & \;\frac{20,000}{53,000} & \;\text{Cash at bank}\; & 6,500 \end{array}

\;\text{Creditors}\; 8,000

\;\text{Accrued expenses}\; \;\frac{4,000}{65,000}\; \;\text{Cash in hand}\; 1,500

\text{Total 65,000}

The amount of working capital is

Solution:

Concept:

Working capital is the excess of current assets over current liabilities.

Explanation:

Current assets include stock, debtors, cash at bank, and cash in hand.

Total current assets

= 3,000 + 4,000 + 6,500 + 1,500 = 15,000

Current liabilities include creditors and accrued expenses.

Total current liabilities

= 8,000 + 4,000 = 12,000

Working capital

= 15,000 - 12,000 = 3,000

Answer:

Working capital is

\text{N3,000}

Correct option: D.

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