Comment on the financial position of the business based on the statement prepared in above also Show the effect on the statement of financial position shown in (a) of a decision to revalue the property to 115,000 and to recognise that the net realisable value of inventories at the year end is 38,000.

\begin{tabular}{|l|l|l|} \hline CURRENT ASSETS: & & \\ \hline Inventory & $45,000 & \\ \hline Accounts Receivable & $48,000 & \\ \hline Cash in Hand & $1,500 & $94,500 \\ \hline NON-CURRENT ASSETS: & & \\ \hline Plant and Machinery & $25,000 & \\ \hline Freehold Premises & $72,000 & \\ \hline Motor Vehicles & $15,000 & \\ \hline Fixtures and Fittings & $9,000 & $121,000 \\ \hline TOTAL ASSETS & & $215,500 \\ \hline CURRENT LIABILITIES: & & \\ \hline Accounts Payable & $18,000 & \\ \hline Bank Overdraft & $26,000 & $44,000 \\ \hline NON-CURRENT LIABILITIES: & & \\ \hline Long term loans & $51,000 & $51,000 \\ \hline TOTAL LIABILITIES & & $95,000 \\ \hline EQUITY: & & \\ \hline Capital & $117,500 & \\ \hline Drawings & ($15,000) & $102,500 \\ \hline Reserves and Surplus i.e. Profit \& Loss & & $18,000 \\ \hline TOTAL EQUITY & & $120,500 \\ \hline TOTAL LIABILITIES AND OWNER'S EQUITY & & $215,500 \\ \hline \end{tabular}