JAMB Accounting 2007 Objective — Question 15

Question 15 of 46 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2007 Objective paper, with the correct answer and a full explanation.

Given: Shaku Company Ltd. Stock 3,600,000; Cash at hand 800,000; Cash in bank 2,400,000; Debtors 580,000; Trade creditors 920,000; Bank overdraft 200,000; Tax liability 600,000; Salary owed to staff 180,000. Determine the working capital.

A. #7,380,000
B. #8,480,000
C. #5,480,000Correct
D. #6,480,000

Explanation

Working capital = Current assets - Current liabilities = (3,600,000+800,000+2,400,000+580,000) - (920,000+200,000+600,000+180,000) = 7,380,000 - 1,900,000 = #5,480,000.

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