CHAPTER 1

THE STATEMENT OF FINANCIAL POSITION

Question 1

(a) Vehicle Asset (f) Inventory Asset

(b) Shop fittings Asset (g) Trade receivables Asset
(c) Cash at bank Asset (h) Bank overdraft Liability
(d) Bank loan Liability (i) Trade payables Liability
(e) Owner’s investment in the Capital (j) Machinery Asset
business

Question 2

(a) Cash in hand Asset (f) Loan from a friend Liability

(b) Equipment Asset (g) Value of owner’s Capital
stake in the business
(c) Amounts owing to suppliers Liability (h) Amounts owed by Asset
customers
(d) Furniture Asset (i) Cash at bank Asset
(e) Land Asset (j) Fittings Asset

Question 3

Total Assets Total Liabilities Capital

Assets = Liabilities + Capital
$ $ $
Business A 80 000 20 000 60 000
Business B 42 000 11 000 31 000
Business C 57 000 33 000 24 000
Business D 650 000 160 000 490 000
Business E 190 000 20 000 170 000
Business F 640 000 82 000 558 000

Question 4

Total Assets Total Liabilities Capital

Assets = Liabilities + Capital
$ $ $
Business G 220 000 30 000 190 000
Business H 912 000 86 000 826 000
Business I 325 000 52 000 273 000
Business J 560 000 77 000 483 000
Business K 917 000 52 000 865 000
Business L 262 000 42 000 220 000
Question 5

(a) Total assets: $456 000

(b) Total liabilities: $90 000
(c) Capital: $366 000
(d)

Donnie’s computer software business

Statement of financial position
at 31 October 2014
$
ASSETS
Premises 300 000
Equipment 90 000
Delivery vehicle 32 000
Inventory 16 000
Trade receivables 14 000
Cash in hand 4 000
456 000
$
CAPITAL 366 000

LIABILITIES
Bank loan 60 000
Trade payables 22 000
Bank overdraft 8 000
456 000
Question 6

(a) Total assets: $711 000

(b) Total liabilities: $147 000
(c) Capital: $564 000

Kisha’s restaurant
Statement of financial position
at 31 January 2014
$
ASSETS
Restaurant premises 570 000
Equipment 51 000
Furniture and fittings 45 000
Inventory (food, etc.) 24 000
Trade receivables 3 000
Cash at bank 12 000
Cash in hand 6 000
711 000
$
CAPITAL 564 000

LIABILITIES
Bank loan 120 000
Loan from friend 9 000
Trade payables 18 000
711 000
Question 7

Donnie’s software business

Statement of financial position at 31 October 2014
$ $
NON-CURRENT ASSETS
Premises 300 000
Equipment 90 000
Delivery vehicle 32 000
422 000
CURRENT ASSETS
Inventory 16 000
Trade receivables 14 000
Cash in hand 4 000
34 000
456 000
$ $
CAPITAL 366 000

NON-CURRENT LIABILITIES
Bank loan 60 000

CURRENT LIABILITIES
Trade payables 22 000
Bank overdraft 8 000
30 000
456 000
Question 8

Kisha’s Restaurant
Statement of financial position at 31 January 2014
$ $
NON-CURRENT ASSETS
Restaurant premises 570 000
Equipment 51 000
Furniture and fittings 45 000
666 000
CURRENT ASSETS
Inventory (food, etc.) 24 000
Trade receivables 3 000
Cash at bank 12 000
Cash in hand 6 000
45 000
711 000
$ $
CAPITAL 564 000

NON-CURRENT LIABILITIES
Bank loan 120 000

CURRENT LIABILITIES
Trade payables 18 000
Loan from friend 9 000
27 000
711 000