Ade Company Limited has an authorized capital of 80,000 shares of N20 each, out of which 30,000 shares have been fully subscribed by the public and allotted as at 31st March 2006. Other assets and liabilities were:
Creditors 35,000
Motor van 90,000
Buildings 65,000
Stock 60,000
Debtors 15,000
Cash 5,000 You are required to calculate:
(a) Issued capital
(b) Unissued capital
(c) Total Assets
(d) Working capital.
Explanation
(a) Issued capital:
Number of shares issued 30,000
Price of a share N20
Value of issued capital N20 x 30,000= N600,000
(b) Unissued capital
Nominal shares 80,000
Issued shares 30,000
Quantity of shares not issued 50,000
price of a share N20
Value of issued capital N20 x 50,000 = N1,000,000
(c) Total assets
motor van 90,000
Building 65,000
stock 60,000
cash 5,000
Debtors 15,000
235,000
(d) working capital: Current assets – current liabilities
stock 60,000
Debtor 15,000
cash 5,000
80,000Less current liabilities
creditors (35,000)
working capital 45,000