Accounting equation - Practice Question

P-Okhai has the following balances as at 31^st December, 20x5

Required:

Calculate P-Okhai’s capital and prepare his statement of financial position as at 31^st December, 20x5

 

Suggested Solution 4.8

To calculate his capital, we need to:

1. Classify,

2. Sum up his assets and liabilities as follows

Thus, total assets = receivables (25,000,000) + inventory (68,245,000) + bank balance (105,253,000) + motor van (36,000,000) + Office building (65,102,000) = ₦299,600,000

Liabilities = Payables (15,054,000) + Loan from Agric bank (15,203,000) = ₦30,257,000

 

Recall that

 

Assets = Capital + Liabilities

Capital = Assets – Liabilities

          = ₦299,600,000 - ₦30,257,000

          = ₦269,343,000

P-Okhai

Statement of Financial Position as at 31^st December, 20x5