# The balance sheet of a sole trader revealed the following position.

###### Question:

Fixed Assets

Land and buildings

R

9 170

R

Equipment at cost less depreciation 15 570

Goodwill at cost less amounts written off 10 250 34 990

Investment in shares at cost 2 200

Current Assets

R

R

45 840

Sundry debtors less bad debts written off

19 350

Cash at bank

10 920

76 110

113 300

=

A

Less: Current Liabilities

R

Sundry creditors and accruals

77 600

=

L

35 700

Owner's Interest

R

R

Capital

28 400

Profit for the year

7 300

35 700

=

0

Required

(a) Are the assets correctly classified? If not, re-arrange them and give your reasons for doing this.

(b) What is the current ratio? Is it satisfactory?

(c) What is the acid-test ratio? Is it satisfactory?

(f) What is the profitability ratio of the business?

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