Equity totals share capital plus reserves only Steps:

• Identify equity components: ordinary share capital (300,000) and general reserve (85,000); exclude debentures as debt.
• Add share capital to general reserve: 300,000 + 85,000.
• Compute total: 385,000.
• Confirm debentures (650,000) do not factor into equity.

Why C is correct:

• Under accounting standards, shareholders' equity sums share capital and reserves, yielding 385,000.

Why the others are wrong:

• A and B (350,000): Understates by omitting full reserve value.
• D (450,000): Overstates by incorrectly including portion of debentures as equity.

Final answer: C