Question

he following information relates to JJ Manufacturers as at 31 August​ 20X3:

	pound£
Plant and equipment	​25,600
Trade payables	​6,400
Cash	​1,200
Drawings for the period to 31 August 20X3	​7,600
Profit for the period to 31 August 20X3	​9,500
Inventories	​8,800
Trade receivables	​10,300

What was the​ owner's equity at the beginning of the financial year to 31 August​ 20X3?

Answer 1

Solution:-

First we calculate Total Assets-

Total Assets = Plant and equipment + Cash + Inventories + Trade receivables

Total Assets = $25,600 + $1,200 + $8,800 + $10,300

Total Assets = $45,900

Then we calculate Total Liabilities-

Total Liabilities = Trade payables + Drawings - Profit

Total Liabilities = $6,400 + $37,600 - $9,500

Total Liabilities = $34,500

To Calculate the​ owner's equity at the beginning of the financial year to 31 August​ 20X3 -

Owner's Equity = Total Assets - Total Liabilities

Owner's Equity = $45,900 - $34,500

Owner's Equity = $11,400

If you have any query related to question then feel free to ask me in a comment. Thanks. Please rate.