JAMB Commerce 2019 Objective — Question 23
Question 23 of 40 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2019 Objective paper, with the correct answer and a full explanation.
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Use the information below to answer these questions. BALANCE SHEET AS AT 31ST DEC, 2018. Liabilities: Paid-up capital ₦200,000; Retained earnings ₦50,000; Creditors ₦50,000; Bills payable ₦50,000; Dividend payable ₦70,000. Total ₦420,000. Assets: Building ₦50,000; Plant & machinery ₦35,000; Fixtures ₦20,000; Debtors ₦50,000; Stocks ₦145,000; Banks ₦120,000. Total ₦420,000. Find the current ratio.
- A. 0.50:1
- B. 0.87:1
- C. 1.5:1
- D. 1.85:1Correct
Explanation
Current assets = Debtors + Stocks + Banks = 50,000+145,000+120,000 = ₦315,000. Current liabilities = Creditors + Bills payable + Dividend payable = 50,000+50,000+70,000 = ₦170,000. Current ratio = 315,000/170,000 = 1.85:1.
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