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Chapter 2

Example 1: Solution

The total value of Nadim's assets on 1 January was $322,000; his liabilities
totalled $257,000. Therefore his capital must be $65,000, calculated as
follows:

Assets = Liabilities + Capital

We can now prepare Nadim’s statement of financial position.

Statement of financial position of Nadim as at 1 January

Assets $000 $000 Capital + Liabilities $000
Non-current assets Capital
Land
Buildings
––––
Non-current liabilities
Bank loan
Current assets
Inventories Current liabilities
Receivables Payables
Bank balance
Cash in hand
––––

–––– ––––

–––– ––––

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