(ai) Explain the following types of capital
- Authorized capital
(aii) Explain the following types of capital
(bi) The following records were extracted from the books of Bandin and Bachur Partnership as at March 31st, 2020
| D | |
| Equipment | 150000 |
| Cash at bank | 25000 |
| Creditors | 120000 |
| Debtors | 150000 |
| Stock as at 1/03/20 | 30000 |
| Motor Van | 300000 |
| Fixtures and fittings | 40000 |
| Overdraft | 45000 |
| Stock as at 31/03/20 | 25000 |
calculate:
- fixed assets;
(bii) The following records were extracted from the books of Bandin and Bachur Partnership as at March 31st, 2020
| D | |
| Equipment | 150000 |
| Cash at bank | 25000 |
| Creditors | 120000 |
| Debtors | 150000 |
| Stock as at 1/03/20 | 30000 |
| Motor Van | 300000 |
| Fixtures and fittings | 40000 |
| Overdraft | 45000 |
| Stock as at 31/03/20 | 25000 |
calculate:
- current liabilities;
(biii) The following records were extracted from the books of Bandin and Bachur Partnership as at March 31st, 2020
| D | |
| Equipment | 150000 |
| Cash at bank | 25000 |
| Creditors | 120000 |
| Debtors | 150000 |
| Stock as at 1/03/20 | 30000 |
| Motor Van | 300000 |
| Fixtures and fittings | 40000 |
| Overdraft | 45000 |
| Stock as at 31/03/20 | 25000 |
calculate:
- current assets;
(iv) The following records were extracted from the books of Bandin and Bachur Partnership as at March 31st, 2020
| D | |
| Equipment | 150000 |
| Cash at bank | 25000 |
| Creditors | 120000 |
| Debtors | 150000 |
| Stock as at 1/03/20 | 30000 |
| Motor Van | 300000 |
| Fixtures and fittings | 40000 |
| Overdraft | 45000 |
| Stock as at 31/03/20 | 25000 |
calculate:
- Working capital;
(v) The following records were extracted from the books of Bandin and Bachur Partnership as at March 31st, 2020
| D | |
| Equipment | 150000 |
| Cash at bank | 25000 |
| Creditors | 120000 |
| Debtors | 150000 |
| Stock as at 1/03/20 | 30000 |
| Motor Van | 300000 |
| Fixtures and fittings | 40000 |
| Overdraft | 45000 |
| Stock as at 31/03/20 | 25000 |
calculate:
- Average stock;
(ai) Authorized capital is also known as Registered or Nominal capital. It is a capital that is stated in the company's
memorandum of association which a company can issue out for subscription.
(aii) Liquid capital is made up of assets that can be easily converted into cash/money. e.g debts, near money, bank balabce etc.
(bi) Fixed assets: Equipment + Motor van + Furnitures and fittings
= 150,000 + 300,000 + 40,000
= D 490,000
(bii) Current liabilities: Creditors + Overdraft
= 120,000 + 45,000
= D 165,000
(biii) Current assets: Cash at bank + Stock + Debtors
= 25,000 + 25,000 + 150,000
= D 200,000
(iv) Working Capital = Current assets - Current liabilities
= 200,000 - 165,000
= D 35,000
(v) Average stock = Opening stock + Closing stock / 2
= 30,000 + 25,000/ 2
= 55,000/2
= D 27,500
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