The following balances were extracted from the ledger of Babatunde, a sole trader, as at 31st December 2025:
| Account Title | Amount (₦) |
|---|---|
| Motor Vehicles (at cost) | 120,000 |
| Accumulated Depreciation on Vehicles | 30,000 |
| Closing Inventory | 45,000 |
| Trade Debtors | 50,000 |
| Provision for Bad Debts | 3,000 |
| Cash at Bank | 8,000 |
| Prepaid Rent | 6,000 |
| Trade Creditors | 32,000 |
| Bank Overdraft | 15,000 |
| Accrued Electricity Bill | 4,000 |
| 5-Year Bank Loan | 60,000 |
What is the value of the Working Capital of the business in Naira as at 31st December 2025?
Cevap: 55000 ₦
Cevap
The Working Capital of the business as at 31st December 2025 is ₦55,000.
Working Capital is determined by subtracting Total Current Liabilities from Total Current Assets. Total Current Assets = ₦45,000 (Inventory) + (₦50,000 - ₦3,000) (Net Debtors) + ₦8,000 (Bank) + ₦6,000 (Prepaid Rent) = ₦106,000. Total Current Liabilities = ₦32,000 (Creditors) + ₦15,000 (Bank Overdraft) + ₦4,000 (Accrued Electricity) = ₦51,000. Working Capital = ₦106,000 - ₦51,000 = ₦55,000.
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Working Capital and Balance Sheet Item Classification