(a) Amatco Ltd has an authorized capital of 6,000,000 ordinary shares of D5.00 per share. It issued 3,000,000 ordinary shares and all such shares were bought and paid for at D2.00 a share except 1,000 shares taken by Mr. Jones. Calculate the value of the: (i) authorized capital (ii) issued capital (iii) called-up capital (iv) paid-up capital. (b) The following are the assets and liabilities of Morgan's Ltd:
N
cash
8,000
Building
81,000
Creditors
6,500
sales returns
12,000
Debtors
18,000
Capital
122,000
Overdraft
11,000
Motor vehicle
20,000
sales
50,000
Net profit
20,000
Explanation
(a) (i) Authorized capital D6,000,000 x D5.00 = D30,000,000 (ii) Issued capital D3,000,000 x D5.00 = D15,000,000 (iii) Called up capital D3,000,000 x D2.00 = D6,000,000 (iv) Paid up capital 3,000,000 - 1000 = 2,999,000 x D2.00 D5,998,000 (b) Working Capital = Current Assets - Current Liabilities(i) Current Assets Debtors N18,000 Cash N8,000 N26,000Less Current liabilities: Creditors N 6,500 Overdraft N11,000 N17,500Working Capital = N8,500 (ii) Net sales Sales N50,000 Less sales return N12,000 N38,000(iii) Net Profit Percentage Net Profit 20000 x 100 = 52.6% Sales 38000 (iv) Fixed Assets Buildings N31,000 Motor vehicle N20,000 N101,000
