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The following is a list of the assets and claims of Zenith Construction as at 31 July last year: Trade payables: $90,000 Motor vehicles: $42,000

  1. The following is a list of the assets and claims of Zenith Construction as at 31 July last year:
    • Trade payables: $90,000
    • Motor vehicles: $42,000
    • Long-term borrowing (loan from Construction Finance Co.): $275,000
    • Equipment and tools: $220,000
    • Short-term borrowings: $130,000
    • Inventories: $155,000
    • Property: $350,000
    • Trade receivables: $190,000

Required:

(a) Prepare the statement of financial position of the business as at 31 July last year from the information provided, using the standard layout. (Hint: There is a missing item that needs to be deduced and inserted.)

(b) Analyze the solvency and profitability revealed by this financial statement.

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