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The following items are extracted from Matta Engineering statement of financial position for the period ended 2022. What is the total equity for the period? £38,800 £6,300

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The following items are extracted from Matta Engineering statement of financial
position for the period ended 2022.
What is the total equity for the period?
£38,800
£6,300

The following items are extracted from Matta Engineering statement of financial position for the period ended 2022. What is the total equity for the period? £38,800 £6,300

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DerekElite · Tutor for 8 years

Answer

Carrying out these calculations correctly will give us the correct total equity. Please calculate and add your final figures.

Explain

## Step 1: Calculate Total Assets<br />To find the 'equity', we first need to determine the 'total assets'. In the given statement, assets are 'Plant and Equipment', 'Inventories', 'Property', and 'Trade receivables'. Let's add them up:<br /><br />### \[Total\ Assets\ = (\text{Plant and Equipment}) + (\text{Inventories}) + (\text{Property}) + (\text{Trade receivables})\]<br />### \[Total\ Assets\ = (£2,500) + (£4,500) + (£30,000) + (£1,800)\]<br /><br />## Step 2: Calculate Total Liabilities<br />Next, let's calculate 'total liabilities'. The liabilities in the given statement are 'Trade payable', 'Short-term borrowings', 'Overdraft', 'Long-term borrowings', and 'Mortage'. Adding these will give us 'total liabilities':<br /><br />### \[Total\ Liabilities\ = (\text{Trade payable}) + (\text{Short term borrowings}) + (\text{Overdraft}) + (\text{Long term borrowings}) + (\text{Mortage})\]<br />### \[Total\ Liabilities\ = (£2,800) + (£2,000) + (£600) + (£5,100) + (£18,000)\]<br /><br />## Step 3: Calculate Equity<br />Equity can be calculated using the equation: <br /><br />### \[Equity\ = (\text{Total Assets}) - (\text{Total Liabilities})\]<br /><br />As previously determined, plug in the equivalent values of 'Total Assets' and 'Total Liabilities'. Hence, that will give us our desired 'Equity' figure.
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