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JAMB Accounts Principles of Accounts 2015 Paper

Question : 33

Total: 69

Compute the capital as at 1st Jan, 2014.

Solution:

Concept:

Capital is the excess of assets over liabilities:

\text{Capital} = \text{Total Assets} - \text{Total Liabilities}

Explanation:

As at 1st Jan, 2014:

Total Assets = Cash in hand + Debtors + Stock + Fittings

= 850 + 15{,}500 + 18{,}000 + 9{,}000 = 43{,}350

Total Liabilities = Bank overdraft + Creditors

= 3{,}500 + 12{,}700 = 16{,}200

Capital =

43{,}350 - 16{,}200 = 27{,}150

Answer:

A. 27,150

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