Use the information below to answer question .

Capital.....................N?
Profit and loss.............N3500
Current assets..............N?
Current liabilities.........N2000
fixed assets................N11000

The company maintains a current ratio of 3:1.
The capital balance is?

adekaybee

9 years ago

The selected answer is wrong:

Current ratio is 3:1 which indicated that current asset is 3x of current liabilities. current liabilities is N2,000 therefore current asset is N6000 (3x2000).

Total Asset = Fixed Asset + Current Asset, which is N11,000+N6,000=N17,000.



Capital + Profit and Loss + current liabilities = Asset

Capital + N3,500 + N2,000 =N17,000

Capital +N5,500=N17,000

Capital=N17,000-N5,500

capital = N11,500

Rajiidris123

1 year ago

the correct ans is C