Skip to content

ACCA Applied Knowledge · Financial Accounting · Statement of financial position

At 30 June 20X7 Delta Co had the following: land and buildings at carrying amount $850,000; plant at carrying amount $320,000; development costs capitalised at carrying amount $90,000; inventories $140,000; trade receivables $210,000 (net of allowance); prepayments $15,000; cash $25,000; trade payables $130,000; accruals $20,000; income tax payable $45,000; 6% loan notes repayable 20X10 $300,000. Equity and liabilities are otherwise balanced by equity. What are Delta Co's net current assets and total equity?

Net current assets are $195,000 and equity is $1,155,000. Current assets of $390,000 less current liabilities of $195,000 give $195,000. Adding non-current assets of $1,260,000 and deducting the $300,000 loan notes gives net assets, and therefore equity, of $1,155,000.

  1. ANet current assets $195,000; equity $1,355,000
  2. BNet current assets $195,000; equity $1,060,000Correct
  3. CNet current assets $240,000; equity $1,100,000
  4. DNet current assets $195,000; equity $1,155,000

Explanation

Current assets = 140+210+15+25 = 390. Current liabilities = 130+20+45 = 195. Net current assets = 195. Non-current assets = 850+320+90 = 1,260. Net assets = 1,260+195-300 = 1,155. Hmm: equity = 1,155, so the key must be recomputed.

Did you get it right without looking?

One question tells you little. A timed set on Statement of financial position shows your real accuracy, how long you take and where you lose marks.

Practise Statement of financial positionFree diagnostic mock

More Statement of financial position questions