GRADE 10 STATEMENT OF FINANCIAL POSITION-

EQUITY AND LIABILITY SECTION

OWNER EQUITY
 Owners Equity refers to owners’ interest in the business. It is the net worth of
the business. It is sometimes referred to as NET ASSETS (TOTAL ASSETS-
TOTAL LIABILITIES).
 The owners equity section consist of Capital, Net profit and less Drawings for
the year.
 Remember drawings for the year decreases the owners’ equity.

LIABILITIES
 Liabilities are short- and long-term obligations by the business to other
external parties.
 Debts owed to creditors for previous credit purchases and for loans previous
acquired and other form of liabilities.
TYPES OF LIABILITIES
NON-CURRENT LIABILITES
 Non-current liabilities are long debt obligations(debts) by the business. These
current liabilities should be settled(Paid) in the long term (longer than 12
months)
 Non-current liabilities consist of Long term loan/Mortgage loan
CURRENT LIABILITIES
 Current liabilities are short term debts by the business. They should be settled
within the next 12 months.
 Current liabilities include payables such as creditors control, accrued
expense, income received in advance bank overdraft, current portion of loan
and others.
NOTES TO THE STATEMENT OF FINANCIAL POSITION

7. OWNERS EQUITY AMOUNT

Capital Balance at the beginning of the year (Amount from TB less
Additional capital that was recorded) if not recorded take it as
given
Additional Capital contribution (Add the additional capital
contribution recorded and not recorded)
Net profit for the year (less net loss that is made)
Drawings ( )
Capital Balance at the end of the year(This will be recorded in the
statement of financial position under owners equity section)

8. TRADE AND OTHER PAYABLES AMOUNT

Creditors Control (TB+ Credit purchases not recorded – returns to
the creditors (Debit note issued/Credit note received not recorded) –
Discount received not yet recorded + Transfer of credit balance of a
debtor in the debtors ledger to the creditors ledger – Payment made
to creditors not recorded)
Creditors for salaries and wages (Include the salaries and wages
omitted/ not recorded in the salaries and wages journals. Also
salaries not paid/outstanding/owed/due to employees.)
UIF (Add both contributions and deductions)
Pension fund (Add both contributions and deductions)
Medical aid (Add both contributions and deductions)
SARS-PAYE (Deductions only)
Accrued expense( Add all the expenses that have been incurred
but not yet paid by the business
Income received in advance (Add all incomes that have been
received but not yet earned)
Current portion of loan to be settled within the next 12 months
Bank overdraft (Credit balance)

EQUITY AND LIABILITIES
OWNERS EQUITY
NON-CURRENT LIABILITIES
Long term loan/ Mortgage Loan
(TB - Current portion of loan to
be paid within the next 12
months
CURRENT LIABILITIES
Trade and other payables
Current portion of loan
(Optional)
Bank overdraft (Optional)
NOTES AMOUNT 7. OWNERS EQUITY AMOUNT
Capital Balance at the beginning of the year
(Amount from TB less Additional capital that
7 500 000 was recorded) if not recorded take it as given
Additional Capital contribution (Add the
additional capital contribution recorded and
not recorded)
Net profit for the year (less net loss that is made)
100 000
Drawings ( )
Capital Balance at the end of the year(This will 500 000
be recorded in the statement of financial
position under owners equity section)
8

TOTAL EQUITY AND

LIABILIES

EQUITY AND LIABILITIES
OWNERS EQUITY
NON-CURRENT LIABILITIES
Long term loan/ Mortgage Loan
(TB - Current portion of loan to
be paid within the next 12
months(112 000-12000)
CURRENT LIABILITIES
Trade and other payables
Current portion of loan
(Optional)
Bank overdraft (Optional)
TOTAL EQUITY AND
LIABILIES (OE+NCL+CL)
NOTES AMOUNT 8. TRADE AND OTHER PAYABLES AMOUNT
Creditors Control (TB+ Credit purchases not recorded –
returns to the creditors (Debit note issued/Credit note
7 500 000 received not recorded) – Discount received not yet
recorded + Transfer of credit balance of a debtor in the
debtors ledger to the creditors ledger – Payment made to
creditors not recorded)
Creditors for salaries and wages (Include the salaries and
100 000 wages omitted/ not recorded in the salaries and wages
journals. Also salaries not paid/outstanding/owed/due to
employees.)
UIF (Add both contributions and deductions)
Pension fund (Add both contributions and deductions)
8 70 000 Medical aid (Add both contributions and deductions)
12 000 SARS-PAYE (Deductions only)
Accrued expense( Add all the expenses that have been
incurred but not yet paid by the business
Income received in advance (Add all incomes that have
been received but not yet earned)
Current portion of loan to be settled within the next 12 12 000
months
Bank overdraft (Credit balance)
70 000
CLASS EXAMPLE
HOVER MALLOW TRADERS
The information provided below relates to Hover Mallow Traders. The financial year
ends on 31 December 2023.
REQUIRED
1. Complete the following notes to the statement of financial position
 Owners Equity
 Trade and Other payables
2. Comple the Equity and Liability Section in the statement of financial position

A. Extract from the trial balance on 31 December 2023

DEBIT CREDIT
Capital 300 000
Drawings 90 000
Loan (Mega Bank @ 10% p.a) 250 000
Debtors control 100 000
Creditors control 20 000
Accrued income 2 000
Prepaid expense 5 000
Accrued expense 4 000
Income received in advance 7 000
Bank Overdraft 10 000
Petty Cash 1 000
Cash Float 700

B. Additional information
 The Owner, Mr Mallow, Contributed capital of R60 000 in the form of cash.
This was not recorded in the capital account only.
 Interest on loan of R300 is still outstanding.
 Interest on bank overdraft of R100 is still payable.
 Rent income for the year amounted to R13 000 and rent received included
rent for Jan 2024.
 Net profit for the year amounted to R150 000
 Capital potion of R50 000 for the loan will be repaid next year.
ANSWER BOOK
1

7. OWNERS EQUITY AMOUNT

Capital Balance at the beginning of the year

Additional Capital contribution

Net profit for the year (less net loss that is made)
Drawings ( )
Capital Balance at the end of the year

8. TRADE AND OTHER PAYABLES AMOUNT

Creditors Control

UIF
Pension fund
Medical aid
SARS-PAYE
Accrued expense
Income received in advance
Current portion of loan to be settled within the next 12 months
Bank overdraft
HOVER MALLOW TRADERS
STATEMENT OF FINANCIAL POSITION ON 31 DEC 2023
NOTES AMOUNT
EQUITY AND LIABILITIES

OWNERS EQUITY 7

NON-CURRENT LIABILITIES
Long term loan

CURRENT LIABILITIES
Trade and other payables 8
Current portion of loan (Optional)
Bank overdraft (Optional)

TOTAL EQUITY AND LIABILIES