Balance Sheet of Acrid Waste Services
as at 30 June 2003
Current Assets
Cash 3 000
Accounts Receivable 5 000
Inventory 9 000
Non-current Assets 7 000
Total Current Assets 16 000
Current Liabilities
Accounts Payable 9 000
Non-current Liabilities 3 000
Owners' Equity
Capital 2 500
Net Profit 1 500
Total Equity 4 000
Total Liabilities and Equity 16 000
Industry Averages
Working Capital Ratio: 1.5 - HSC - SSCE Business Studies - Question 9 - 2003 - Paper 1
Question 9
Balance Sheet of Acrid Waste Services
as at 30 June 2003
Current Assets
Cash 3 000
Accounts Receivable ... show full transcript
Worked Solution & Example Answer:Balance Sheet of Acrid Waste Services
as at 30 June 2003
Current Assets
Cash 3 000
Accounts Receivable 5 000
Inventory 9 000
Non-current Assets 7 000
Total Current Assets 16 000
Current Liabilities
Accounts Payable 9 000
Non-current Liabilities 3 000
Owners' Equity
Capital 2 500
Net Profit 1 500
Total Equity 4 000
Total Liabilities and Equity 16 000
Industry Averages
Working Capital Ratio: 1.5 - HSC - SSCE Business Studies - Question 9 - 2003 - Paper 1
Step 1
Calculate Total Current Assets
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Answer
Total Current Assets is calculated by summing all current assets:
Total Current Assets = Cash + Accounts Receivable + Inventory
Substituting in the values:
Total Current Assets = 3000 + 5000 + 9000 = 16000
Step 2
Calculate Total Liabilities
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Answer
Total Liabilities consists of Current Liabilities plus Non-current Liabilities:
Total Liabilities = Accounts Payable + Non-current Liabilities
Substituting in the values:
Total Liabilities = 9000 + 3000 = 12000
Step 3
Calculate Owners' Equity
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Answer
Owners' Equity can be determined from the balance sheet as:
Owners' Equity = Capital + Net Profit
Substituting in the values:
Owners' Equity = 2500 + 1500 = 4000
Step 4
Verify Total Liabilities and Equity
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Answer
The balance sheet must satisfy the equation: Total Assets = Total Liabilities + Total Equity.
Total Assets = Total Current Assets + Non-current Assets = 16000 + 7000 = 23000
Total Liabilities and Equity = Total Liabilities + Owners' Equity = 12000 + 4000 = 16000
This confirms that the balance sheet is correctly balanced.
