Use the following information to answer the given question.
BALANCE SHEET AS AT 31st DECEMBER, 2010
(begin{array}{c|c} & ₦ & & ₦ \ hline text{Capital}& 40,000 & text{Freehold premises} & 50,000\ text{Less: Net loss} & frac{5,000}{35,000} & text{Stock} & 3,000\ text{Less: Drawings} & frac{2,000}{33,000} & text{Debtors} & 4,000\ text{Long term loan} & frac{20,000}{53,000} & text{Cash at bank} & 6,500\ text{Creditors} & 8,000\ text{Accrued expenses} & frac{4,000}{65,000} & text{Cash in hand} & 1,500\ & & & text{Total 65,000}end{array})
The amount of working capital is
-
A.
₦11,000 -
B.
₦7,00 -
C.
₦4,000 -
D.
₦3,000
Correct Answer: Option D
Explanation
Working capital = current assets – current liabilities
current assets= 3000 + 4000 + 6500 + 1500 = 15000
current liabilities= 8000 + 4000 = 12000
15000 – 12000 = 3000