The following is a summary of the assets and liabilities of Odika Enterprises for the year ended December 31st 2000.
N
motor vehicle
60,000
fixtures & fittings
60,000
machinery
65,000
warehouse
18,000
stock
20,000
prepayment
10,000
Accrued expenses
12,000
cash-in-hand
8,000
cash at bank
6,000
bank overdraft
3,500
creditors
5,000
Debtors
6,000
premises
75,000
(a) From the above figures, calculate the following, showing all workings: (i) capital owned (ii) fixed assets (iii) working capital. (b) List five sources of capital available to a public limited company.
Explanation
(a)(i) Fixed Assets: Premises N75,000 Motor Vehicles N60,000 Fixtures and fittings N60,000 Machinery N65,000 Warehouse N18,000 current assets: Stock N20,000 Prepayment N10,000 Cash-in-hand N8,000 Cash-at-Bank N6,000 Debtors N6,000 328,000 Total Liabilities = Accrued Expenses N12,000 Bank Overdraft N3,500 Creditors N5,000 20,500 307,500 (ii) Fixed Assets: Premises N75,000½ Motor Vehicles N60,000½ Fixtures and Fittings N60,000½ Machinery N65,000½ Warehouse N18,000½ N278,000½ (iii) Working Capital = Current Assets — Current Liabilities Current Assets = Stock N20,000 Prepayment N10,000 Cash-in-hand N8,000 Cash-at-bank N6,000 Debtors N6,000 N50,000Current Liabilities = Accrued Expenses N12,000 Bank Overdraft N3,500 Creditors N5.000 N20,500 N29,500 (b) The following are sources of capital available to a public limited company namely: (i) Shares (ii) Debentures (iii) Trade credit (iv) Plough back profits (v) Leasing (vi) Debt factoring (vii) Bank loans and overdrafts etc (vi, Sale of assets (ix) Sale/lease back.
