A junior accounts clerk has prepared the following summarized information as at 30 June 2008 for earth Ltd:
Assets:
Inventories (at lower of cost and net realizable value) $ 970000
Accounts receivable $651020
Cash $1 598080
Land and buildings $1750000
Plant and equipment $1716000
Prepayments $3400
Calls in arrears (2500 shares at 20c) $500
Patents --- cost $100000
total assets: $$ 6789000
Upon further investigation, you have discovered the following additional information:
(a)Liabilities of $ 1038520 comprise;
Accounts payable $790000
Accrued expenses $8520
Mortgage loans $240000

(b)Reserves and provisions of $1089000 include:
Employee benefits (payable after 1 July 2015) $400000
Current tax liability $160000
Dividends $200000
Allowance for impairment of receivables $10000
Accumulated depreciation-plant and equipment $72000
Accumulated depreciation-buildings $ 207000
Accumulated amortization-patents $40000

(c)Cash of $1598080 consists of:

Cash at bank $298080
9.5% Telstra bonds (regarded as long term investments) $1300000
(d)Retained earnings balance as at 1 July 2007 was $275000
(e)Profit for the period was $500480
(f)Shareholder approval is not required for final dividends declared by directors
(g)During the year, Earth Ltd paid $75 000 to its auditor, of which $19000 related to services other than the annual audit and half-yearly review
(h)On 29 June 2008, Earth Ltd entered into a contract with Space Fabricators Ltd for the construction of two new moulding machines at a cost of $1500000 each. No amounts have been recognized in relation to this contract. The company expects to take delivery of the first machine in December 2008, and the second 12 months later. Payment is required on delivery.


As my answers goes like this : I tried but I could not get asset= liabilities + owners equity

Balance sheet 30 June 2008
Current assets:
Cash at bank: 298080
Inventory: 970000
Prepayments: 3400
Account receivable: 651020
Less: receivable: (10000)
Total current assets: 1912500
Non current assets:
Land & building: 1750000
Less accumulated depreciation: (207000)
Plant & equipment: 1716000
Less plant & equipment: (72000)
Total non current assets: 3187000
Intangible assets:
Patents: 100000
Less: patents: (4000)
Total intangible assets: 96000
Total assets: 5195500

Liabilities:
Current liabilities:
Account payable: 790000
Accrued expenses: 8520
Total current liabilities: 798520
Non current liabilities:
Mortgage loan: 240000
Bonds: 1300000
Employee benefits: 400000
Current tax liabilities: 160000
Total non current liabilities: 2100000
Owner’s equity:
Capital: 0
Add: net profit: 500480
Retain earning: 275000
Total equity: 527980
Here now
Assets = liabilities + owner’s equity
5195500= 2100000 + 527980
so as it must be equal I did't get as I don't have got any idea or clue where to put the calls in arrears..
Changes in equity 30 June 2008
Additional capital: 114000
Share outstanding (calls arrears): 50000
Balance 30 June 2008: 164000
Profit for the year: 500480
Less: dividend paid: 200000
Balance 30 June 2008: 700480
Total owner’s equity: 864480

Is the way I did for change in equity is right..?

I can't totally answer this, but I can tell you some problems.

First, the original info given doesn't balance to begin with. There's no capital stock. I don't know where you got the information for the changes in equity. You have that down in the "your work" section but none of those numbers are up in the problem. Even if I use that ending balance for equity, it still doesn't balance when I do it. You have no beginning capital stock balance. Having that might make the initial info balance, who knows.

You've got two different numbers for amortization - 4000 one place and 40,000 another.

The 1,300,000 of bonds is an investment not a liability. Do not assume that all stock is equity and that all bonds are liabilities. Companies invest in things too, and those investments are assets. The bonds go under Investments. (It even tells you where to put it.)

"Current tax liability" is current.

The 200,000 of dividends is listed under reserves and provisions. If it's under that section, I assume that's dividends payable.

And I have no clue what calls in arrears are either. Since it's listed with the assets, then I'm going to assume it means that from an investing point of view, and I don't know anything about calls.