Statement of financial position — practice questions

1. Calculate Equity Equity = Total Assets − Total Liabilities Equity = $500,000 − ($80,000 + $150,000)$ Equity = $500,000 -$230,000 = **$270,000**$

2. Calculate Working Capital Working Capital = Current Assets − Current Liabilities Working Capital = $200,000 −$80,000 = **$120,000**$

Step 1: Calculate Current Assets Current Assets = Inventory + Trade receivables + Cash at bank = $60,000 +$45,000 + $15,000 =$120,000

Step 2: Calculate Total Assets (a) Total Assets = Non-current assets + Current Assets = $350,000 +$120,000 = **$470,000**$

Step 3: Calculate Total Equity (b) Total Equity = Share capital + Retained earnings = $200,000 +$125,000 = **$325,000**$

Step 4: Use the Accounting Equation to find Total Liabilities Assets = Liabilities + Equity $470,000 = Total Liabilities + $325,000 Total Liabilities = $470,000 -$325,000 = $145,000$

Step 5: Calculate Current Liabilities (c) Current Liabilities = Total Liabilities - Non-current liabilities = $145,000 -$90,000 = **$55,000**$

*Check: The statement balances as Total Assets ($470,000) = Total Liabilities ($145,000) + Total Equity ($325,000).*$