Use the information below to answer questions Total current assets………………N2,000 Total fixed assets………………..N4,000 Current liabilities……………….N1,200…

Use the information below to answer questions
Total current assets………………N2,000
Total fixed assets………………..N4,000
Current liabilities……………….N1,200
Drawings…………………………N200
Long-term loan……………………N2,000
Determine the capital of the business?

  • A.
    N9,400
  • B.
    N6,000
  • C.
    N3,400
  • D.
    N3,000
Correct Answer: Option D
Explanation

Capital = Assets – liabilities

Assets = Fixed assets + current assets + drawings

2000 + 4000 + 200 = 6200

Liabilities = current liabilities + longterm loans

1200 + 2000 = 3200

6200 – 3200 = 3000

 

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