Use the information below to answer questions below<br/><table class='tbn'><br/><tbody><br/><tr><br/><td> </td><br/><td> <br/>#<br/> </td><br/></tr><br/><tr><br/><td> <br/>Sales<br/> </td><br/><td> <br/>50,000.00<br/> </td><br/></tr><br/><tr><br/><td> <br/>Debtors<br/> </td><br/><td> <br/>10,000.00<br/> </td><br/></tr><br/><tr><br/><td> <br/>Cash in hand<br/> </td><br/><td> <br/>5,000.00<br/> </td><br/></tr><br/><tr><br/><td> <br/>Opening stock<br/> </td><br/><td> <br/>30,000.00<br/> </td><br/></tr><br/><tr><br/><td> <br/>Creditors<br/> </td><br/><td> <br/>8,000.00<br/> </td><br/></tr><br/><tr><br/><td> <br/>Purchases<br/> </td><br/><td> <br/>16,000.00<br/> </td><br/></tr><br/><tr><br/><td> <br/>Overdraft<br/> </td><br/><td> <br/>12,000.00<br/> </td><br/></tr><br/><tr><br/><td> <br/>Closing stock<br/> </td><br/><td> <br/>10,000.00<br/> </td><br/></tr><br/></tbody><br/></table><br/>Calculate the working capital
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Correct Answer: Option C
Explanation:
Working capital is calculated as current assets minus current liabilities.<br/><br/>Current assets include debtors, cash in hand, and closing stock:<br/>\( \text{Current Assets} = 10,000 + 5,000 + 10,000 = 25,000 \)<br/><br/>Current liabilities include creditors and overdraft:<br/>\( \text{Current Liabilities} = 8,000 + 12,000 = 20,000 \)<br/><br/>\( \text{Working Capital} = \text{Current Assets} - \text{Current Liabilities} \)<br/>\( \text{Working Capital} = 25,000 - 20,000 = 5,000 \)<br/><br/>Therefore, the working capital is #5,000.00.
Working capital is calculated as current assets minus current liabilities.<br/><br/>Current assets include debtors, cash in hand, and closing stock:<br/>\( \text{Current Assets} = 10,000 + 5,000 + 10,000 = 25,000 \)<br/><br/>Current liabilities include creditors and overdraft:<br/>\( \text{Current Liabilities} = 8,000 + 12,000 = 20,000 \)<br/><br/>\( \text{Working Capital} = \text{Current Assets} - \text{Current Liabilities} \)<br/>\( \text{Working Capital} = 25,000 - 20,000 = 5,000 \)<br/><br/>Therefore, the working capital is #5,000.00.