P. Moyo, a sole trader, had the following at 1 January 2015: premises at cost $80 000, fixtures and fittings at valuation $8 000, motor vehicles at net book value $7 000, inventory $22 000, trade receivables $13 750, rent prepaid $600, petty cash $500, bank$ 16 500, trade payables $16 500 and wages accrued $1 000. Calculate his capital at 1 January 2015.

Model answer

130850

Also accepted: 130 850, $130 850

Explanation

Capital = assets - liabilities. Assets: $80 000 + $8 000 + $7 000 + $22 000 + $13 750 +

600 +

500 + $16 500 = $148 350. Liabilities: $16 500 + $1 000 = $17 500. Capital = $148 350 - $17 500 = $130 850.

Derived from ZIMSEC Accounting 6001/2 Paper 2, November 2018, Q1

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