Gurbinder Limited has non-current assets of £250,000, current assets of £142,000, current liabilities of £125,000 and equity of £150,000. Using the accounting equation, calculate the figure for non-current liabilities.
A) £667,000
B) £383,000
C) £367,000
D) £117,000

Question

Quizplus · Accepted Answer

The accounting equation is Assets = Liabilities + Equity. Total assets are £250,000 (non-current) + £142,000 (current) = £392,000. Total liabilities and equity are £125,000 (current liabilities) + £150,000 (equity) + non-current liabilities. Solving for non-current liabilities: £392,000 = £275,000 + non-current liabilities, so non-current liabilities = £117,000.

Gurbinder Limited Has Non-Current Assets of £250,000, Current Assets of £142,000