Capital equals total assets minus total liabilities per the accounting equation

Steps:

• Sum non-current assets and current assets for total assets: 130,000 + 180,000 = 310,000
• Sum non-current liabilities and current liabilities for total liabilities
• Apply the balance sheet equation: Capital = total assets - total liabilities
• Resulting capital balance is 190,000

Why B is correct:

• The accounting equation for a sole trader's statement of financial position defines capital as the residual interest in assets after deducting liabilities, yielding 190,000.

Why the others are wrong:

• A: Understates capital by overstating total liabilities (e.g., assuming higher non-current liabilities like 20,000 extra).
• C: Overstates capital by understating total liabilities (e.g., ignoring 70,000 in liabilities).
• D: Ignores non-current liabilities, subtracting only current liabilities from total assets.

Final answer: B