(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