1. The following is a list of the assets and claims of Kappa Manufacturing as at 31 December last year:
   • Trade payables: €92,000
   • Motor vehicles: €46,000
   • Long-term borrowing (loan from Manufacturing Finance Co.): €280,000
   • Equipment and tools: €230,000
   • Short-term borrowings: €130,000
   • Inventories: €160,000
   • Property: €365,000
   • Trade receivables: €200,000

Required:

(a) Prepare the statement of financial position of the business as at 31 December 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 financial flexibility revealed by this financial statement.