ESCUELA UNIVERSITARIA DE ESTUDIOS EMPRESARIALES

FINANCIAL ACCOUNTING

(DIPLOMATURA EN CIENCIAS EMPRESARIALES, 2º CURSO, GRUPO 5)

2008-2009

EXERCISES LESSON 3

BALANCE SHEET

2BALANCE SHEET: LESSON 3

EXERCISE 1 (LESSON 3)

The following list of accounts for Company Risks Ltd. is available at the end of 200X.

Accounts payable for goods 132,000

Accounts payable for services 40,000

Accounts receivable, bill of exchange 10,000

Accumulated depreciation of constructions 30,000

Advances to suppliers 12,000

Called subscribed capital receivable 3,000

Capital grants 40,000

Capital stock 150,000

Cash 84,150

Cash equivalents 500,000

Constructions 120,000

Expenses paid in advance 5,500

Impairment of constructions 6,000

Impairment of inventories of other supplies 400

Income for the year 308,750

Interest payable to credit institutions 3,000

Inventories of other supplies 1,500

Land 140,000

Provisions for other responsibilities 20,000

Salary paid in advance 3,000

Short-term debt with credit institutions 150,000

Short-term holdings in equity 6,000

VAT payable 5,000

REQUIRED: Prepare the Balance Sheet according to the normal model of the new PGC.

EXERCISE 2 (LESSON 3)

The following list of accounts for Company C.V. Ltd. is available at the end of 200X.

Long-term holdings in equity (1) 2,500

Shares in the entity held by the entity 1,000

Salary payable 20

Adjustments for changes in value of financial instruments available for sale 50 Accumulated depreciation of intangible assets 950 Accumulated depreciation of tangible fixed assets (2) 1,000

Customers advances 100

Cash 1,335

Capital stock 21,000

Accounts receivable 200

Constructions (3) 5,000

Constructions in progress 300

Short-term credit from the sale of tangible fixed assets 500

Impairment of inventories of goods for sale 100

Short-term debt with credit institutions 2,000

3Long-term debt with credit institutions 2,000

Other owners' contributions 200

Vehicles 4,000

Computers 2,000

Inventories of goods for sale 1,000

Short-term deposits and guarantees given 500

Expenses paid in advance 270

Payable to public authorities (withholdings) 220 Receivable from public authorities (income tax refund) 50

Interest payable to credit institutions 10

Interest receivable 50

Furniture 5,200

Income for the year 1,925

Intellectual property 4,000

Accounts payable for goods 50

Provisions for environmental actions 500

Prior years' negative income 300

Legal reserve 1,600

Uncalled subscribed capital receivable 5,000

Capital grants 1,500

(1) These are shares that have been classified by the company as "available for sale". (2) The breakdown of the accumulated depreciation is the following:

Constructions: 500

Furniture: 250

Computers: 100

Vehicles: 150

(3) A warehouse with a value of 2,000 (accumulated depreciation: 200) is not being used in the operations but being rented to another company. REQUIRED: Prepare the Balance Sheet according to the normal model of the new PGC.

SOLUTION

ASSETS LIABILITIES

A) NON-CURRENT ASSETS 200X A) EQUITY 200X

I. Intangible assets. A-1) Shareholders' equity.

1. Research and development. I. Capital.

2. Administrative concesions. 1. Registered capital. 21.000

3. Intelectual property, trademarks and others. 3.050 2. (Uncalled subscribed capital). - 5.000

4. Goodwill. II. Additional paid-in capital.

5. Computer software. III. Reserves.

6. Other intangible assets. 1. Legal and statutory. 1.600

II. Tangible fixed assets. 2. Other reserves.

1. Land and structures. 2.700 IV. (Shares in the entity held by the entity). - 1.000

2. Plant and machinery, tools, furniture and other

tangible assets. 10.700 V. Prior years' income.

3. Tangible fixed assets in progress and advances. 300 1. Non-distributed income.

III. Investment property. 2. (Prior years' negative income). - 300

1. Land. VI. Other owners' contributions. 200

2. Structures. 1.800 VII. Income for the year. 1.925

IV. Long-term investments in subsidiaries and

associated companies. VIII. (Dividends paid in advance).

1. Shares and long-term holdings in equity of

subsidiaries and associated companies. IX. Other equity instruments. 4

2. Long-term loans to subsidiaries and associated

companies. A-2) Adjustments for changes in value.

3. Other long-term investments. I. Financial instruments available for sale. 50

V. Long-term financial investments. II. Hedging operations.

1. Shares and long-term holdings in equity. 2.500 III. Other.

2. Long-term credits to companies. A-3) Grants, donations and legacies received. 1.500

3. Other long-term financial investments. B) NON-CURRENT LIABILITIES

VI. Deferred tax assets. I. Long-term provisions.

1. Provisions for long-term employee benefits.

B) CURRENT ASSETS 2. Environmental actions. 500 I. Non-current assets held for sale. 3. Provisions for reestructuring.

II. Inventories. 4. Other provisions.

1. Commercial (goods for sale). 900 II. Long-term debt.

2. Raw materials and other supplies. 1. Debentures and other negotiable securities.

3. Work-in process. 2. Long-term debt payable to credit institutions. 2.000

4. Finished goods. 3. Other (deposits and guarantees, bills of exchange,

etc.).

5. Auxiliary products, consumables and

replacements. III. Long-term debt payable to subsidiaries and associated companies.

6. Advances to suppliers. IV. Deferred tax liability.

III. Trade accounts receivables and other

receivables.

1. Trade accounts receivables for sale and services. 200 C) CURRENT LIABILITIES

2. Accounts receivables from subsidiaries and

associated companies. I. Liabilities linked to non-current assets held for sale.

3. Sundry accounts receivables. II. Short-term provisions.

4. Employee receivables. III. Short-term debt.

5. Assets for current tax. 50 1. Debentures and other negotiable securities.

6. Other receivables from public authorities. 2. Short-term debt payable to credit institutions. 2.010

7. Called subscribed capital receivable. 3. Short-term derivative financial instruments.

IV. Short-term investments in subsidiaries and

associated companies. 4. Other (deposits and guarantees, bills of exchange, etc.).

1. Shares and short-term holdings in equity of

subsidiaries and associated companies. IV. Short-term debt payable to subsidiaries and associated companies.

2. Short-term loans to subsidiaries and associated

companies. 1. Debt payable to subsidiaries and associated companies.

3. Other short-term investments. 2. Subscribtions to share capital called.

V. Short-term financial investments. V. Trade accounts payable and other payable.

1. Shares and short-term holdings in equity. 1. Trade accounts payable for purchases and services. 50

2. Short-term credits to companies. 550 2. Accounts payable to subsidiaries and associated

companies.

3. Short-term derivative financial instruments. 3. Sundry accounts payable.

4. Other short-term financial investments. 500 4. Salary payable. 20

VI. Accrual accounts. 270 5. Liability for current tax. VII. Cash and cash equivalents. 6. Other payable to public authorities. 220

1. Cash. 1.355 7. Customer advances. 100

2. Cash equivalents. VI. Accrual accounts.

TOTAL ASSETS 24.875 TOTAL LIABILITIES 24.875

5EXERCISE 3 (LESSON 3)

The following list of accounts for Company Y Ltd. is available at the end of 200X.

ACCOUNT AMOUNT

Accounts payable for goods 170,000

Accounts payable for services 80,000

Accounts receivable 95,000

Accumulated depreciation of intangible assets 40,000 Accumulated depreciation of tangible fixed assets and investment property (1) 80,000

Additional paid in capital 30,000

Advances to suppliers 5,000

Capital grants 45,000

Capital stock 300,000

Cash 2,000

Computer hardware 130,000

Computer software 90,000

Containers and packaging returnable by customers 20,000

Dividend receivable 18,000

Doubtful accounts receivable 12,000

Furniture 25,000

Goodwill 200,000

Impairment of accounts receivables 12,000

Impairment of inventories of goods for sale 3,000

Impairment of investment property (land) 15,000

Income for the year (profits) 45,000

Interest payable 1,000

Inventory of goods for sale 38,000

Investments in constructions 100,000

Investments in land 60,000

Long term credits to employees 40,000

Long term debt with credit institutions 120,000

Long term deposits in financial institutions 70,000 Long term deposits and guarantees received 75,000 Long term holdings in equity (initial balance) (2) 215,000 Payable to public authorities (Income tax) 10,000 Payable to public authorities (social security) 18,000

Payable to public authorities (VAT) 29,000

Provision for other responsibilities 120,000

Revenues received in advance 35,000

Short term credits 6,000

Short term debt with credit institutions 36,000

Short term debt with suppliers of fixed assets 12,000

Short term holdings in equity 150,000

Sundry accounts receivables 55,000

Uncalled subscribed capital receivable 75,000

Vehicles 180,000

Voluntary reserve 270,000

The breakdown of the accumulated depreciation is the following: (1) Furniture: 5,000 (2) Computer hardware: 25,000 6 (3) Vehicles: 30,000 (4) Investments in constructions: 20,000

These are shares that have been classified by the company as "available for sale". There are two groups

of shares:

Holdings in company A:

Book value (1/1/2007): 42,000

Market value (31/12/200X): 50,000

Holdings in company B:

Book value (1/1/2007): 173,000

Market value (31/12/200X): 150,000

These holdings have not yet been valued at fair value.

REQUIRED:

1) Register the valuation at fair value of the long term holdings in equity.

2) Prepare the Balance Sheet according to the normal model of the new PGC.

EXERCISE 4 (LESSON 3)

The following list of accounts for Company Y Ltd. is available at the end of 2008. Advances from customers 3.150 Short term debt with credit institutions 29.890 Accounts receivable, bill of exchange 118.600 Interest payable to credit institutions 600

Short term debt with credit institutions from the

discounting of bills of exchange 46.400 Long-term debt payable to suppliers of fixed assets

48.920

Salary payable 800 Voluntary reserve 103.881

Adjustments for changes in value of financial

instruments available for sale 2.550 Short-term debt payable to suppliers of fixed assets

11.420

Salary paid in advance 2.100 Computer software10.000

Capital stock 370.000 Constructions 460.000

Uncalled subscribed capital receivable 20.000 Machinery 200.000

Legal reserve 50.000 Plant and equipment 100.000

Accumulated depreciation of intangible assets 2.400 Inventory of raw materials 2.100 Accumulated depreciation of tangible fixed assets (1)

80.000 Inventory of finished goods 8.100

Impairment of plant and equipment 8.590 Inventory of work-in process 2.700 Called subscribed capital receivable 1.260 Capital grants 5.600 Cash 146.060 Provision for other responsibilities 95.000 Machinery classified as held for sale 30.000 Payable to public authorities (Income Tax) 49.855 Debt with suppliers of fixed assets (of the machinery held for sale) 10.000 Expenses paid in advance 1.800 Accounts payable 7.800 Payable to public authorities (VAT) 10.400 Long term holdings in equity 7.000 Income for the year ¿?

Impairment of inventory of finished goods 600

(1) The breakdown of the accumulated depreciation is the following: a. Constructions: 50,000 b. Machinery: 20,000 c. Plant and equipment: 10,000 REQUIRED: Prepare the Balance Sheet according to the normal model of the new PGC.

7SOLUTION

ASSETS LIABILITIES

A) NON-CURRENT ASSETS 200X A) EQUITY 200X

I. Intangible assets. A-1) Shareholders' equity.

1. Development. I. Capital.

2. Administrative concesions. 1. Registered capital. 370.000

3. Intelectual property, trademarks and others. 2. (Uncalled subscribed capital). - 20.000

4. Goodwill. II. Additional paid-in capital (share premium).

5. Computer software.

7.600 III. Reserves.

6. Other intagible assets. 1. Legal and statutory. 50.000

II. Tangible fixed assets. 2. Other reserves. 103.881

1. Land and structures.

410.000 IV. (Shares and holding in equity of the

company/Shares in the entity held by the entity).

2. Plant and machinery, tools, furniture and

other tangible assets.

261.410 V. Prior years' income.

3. Tangible fixed assets in progress and

advances. 1. Non-distributed income. III. Investment property. 2. (Prior years' negative income).

1. Land. VI. Other owners' contributions.

2. Structures. VII. Income for the year. 171.864

IV. Long-term investments in subsidiaries

and associated companies. VIII. (Dividends paid in advance).

1. Holdings in equity. IX. Other equity instruments.

2. Loans to companies. A-2) Adjustments for changes in value.

3. Debt instruments. I. Financial instruments held for sale. 2.550

4. Derivative financial instruments. II. Hedging operations.

5. Other financial assets. III. Other.

V. Long-term financial investments. A-3) Grants, donations and legacies received. 5.600

1. Holdings in equity.

7.000 B) NON-CURRENT LIABILITIES

2. Loans to companies. I. Long-term provisions.

3. Debt instruments. 1. Provisions for long-term employee benefits.

4. Derivative financial instruments. 2. Environmental actions.

5. Other financial assets. 3. Provisions for reestructuring.

VI. Deferred tax assets. 4. Other provisions. 95.000

II. Long-term debt.

B) CURRENT ASSETS 1. Debentures and other negotiable securities. I. Non-current assets held for sale. 30.000 2. Long-term debt payable to credit institutions. II. Inventories. 3. Long-term debt from leasing contracts.

1. Commercial (goods for sale). 4. Derivative financial instruments.

2. Raw materials and other supplies. 2.100 3. Other financial liabilities. 48.920

3. Work-in process. 2.700 III. Long-term debt payable to subsidiaries and

associated companies.

4. Finished goods. 7.500 IV. Deferred tax liability.

5. Auxiliary products, consumables and

replacements. V. Long-term accrual accounts.

6. Advances to suppliers.

III. Trade accounts receivables and other

receivables. C) CURRENT LIABILITIES

1. Trade accounts receivables for sale and

services. 118.600 I. Liabilities linked to non-current assets held for sale 10.000

2. Accounts receivables from subsidiaries and

associated companies. II. Short-term provisions.

3. Sundry accounts receivables. III. Short-term debt.

4. Employee receivables. 2.100 1. Debentures and other negotiable securities.

5. Assets for current tax. 2. Short-term debt payable to credit institutions. 76.890

6. Other receivables from public authorities. 3. Short-term debt from leasing contracts.

7. Called subscribed capital receivable. 1.260 4. Derivative financial instruments.

IV. Short-term investments in subsidiaries

and associated companies. 3. Other financial liabilities. 11.420

1. Holdings in equity. IV. Short-term debt payable to subsidiaries and

associated companies.

2. Loans to companies. V. Trade accounts payables and other payables.

3. Debt instruments. 1. Trade accounts payables for purchases and services. 7.800

4. Derivative financial instruments. 2. Accounts payables to subsidiaries and associated

companies.

5. Other financial assets. 3. Sundry accounts payable.

V. Short-term financial investments. 4. Salary payable. 800

1. Holdings in equity. 5. Liability for current tax. 49.855

2. Loans to companies. 6. Other payables to public authorities. 10.400

3. Debt instruments. 7. Customer advances. 3.150

4. Derivative financial instruments. VI. Short term accrual accounts.

5. Other financial assets.

VI. Accrual accounts. 1.800

VII. Cash and cash equivalents.

1. Cash. 146.060

2. Cash equivalents.

TOTAL ASSETS

998.130 TOTAL LIABILITIES 998.130

EXERCISE 5 (LESSON 3) - From exam of course 0708

Company Smith, Inc. shows the following list of accounts in its adjusted trial balance at the end of year 2008.

Accounts payable for goods 70,000

Accounts payable for services 80,000

Accounts receivable 90,000

Additional paid-in capital 10,000

Advances from customers 10,000

Advances to suppliers 5,000

Capital stock 500,000

Cash 40,000

Cash equivalents 4,000

Computer hardware 70,000

Computer software 5,000

Development 200,000

Doubtful accounts receivable 2,000

Expenses paid in advance 35,000

Furniture 25,000

Impairment of inventory of goods for sale 3,000

Impairment of investments in constructions 15,000 Impairment of tangible fixed assets (machinery) 6,000

Impairment of trade accounts receivable 2,000

Income for the year (profits) 30,000

Intangible fixed assets accumulated depreciation (2) 80,000

Intellectual property 55,000

Interest payable to credit institutions 2,000

Inventory of goods for sale 8,000

Investments in constructions 80,000

Investments in land 30,000

Legal reserve 85,000

Long term credits to employees 10,000

Long term deposits in financial institutions 75,000

Long term guarantees given 25,000

9 Long-term credit with buyers of tangible fixed assets 10,000

Long-term debt with credit institutions 120,000

Long-term holdings in equity (3) 200,000

Machinery 20,000

Payable to public authorities (Income Tax) 7,000

Payable to public authorities (social security) 18,000

Payable to public authorities (VAT) 9,000

Prior years negative income 5,000

Provision for environmental actions 20,000

Revenues received in advance 5,000

Short term credits 6,000

Short-term debt with credit institutions 6,000

Short-term debt with suppliers of fixed assets 2,000

Short-term holdings in equity 20,000

Tangible fixed assets accumulated depreciation (1) 30,000

Uncalled subscribed capital receivable 60,000

Vehicles 30,000

(4) The breakdown of the accumulated depreciation of tangible fixed assets (30,000) is the following:

Furniture: 10,000

Computers: none.

Vehicles: 10,000

Machinery: 10,000

(5) The breakdown of the accumulated depreciation of intangible fixed assets (80,000) is the following:

Development: 58,000

Computer software: 2,000

Intellectual property: 20,000

(3) These are shares that were bought at the beginning of the year and have been classified by the company

as "available for sale". Their value at the beginning and at the end of the year has been the following:

Book value (1/1/2008): 200,000

Market value (31/12/2008): 175,000

These holdings have not yet been valued at fair value.

REQUIRED:

a) Register the valuation at fair value of the long term holdings in equity. b) Prepare the Balance Sheet according to the format established by the P.G.C. 2007.

SOLUTION

25,000 (800) Losses from

available for sale financial assets to (250) Long-term holdings in equity instruments 25,000

25,000 (133) Adjustments for

changes in value of financial instruments held for sale to (800) Losses from available for sale financial assets 25,000 10

ASSETS LIABILITIES

A) NON-CURRENT ASSETS 200X A) EQUITY 200X

I. Intangible assets. A-1) Shareholders' equity.

1. Development. 142.000 I. Capital.

2. Administrative concesions. 1. Registered capital. 500.000

3. Intelectual property, trademarks and others. 35.000 2. (Uncalled subscribed capital). - 60.000

4. Goodwill. II. Additional paid-in capital (share

premium). 10.000

5. Computer software. 3.000 III. Reserves.

6. Other intagible assets. 1. Legal and statutory. 85.000

II. Tangible fixed assets. 2. Other reserves.

1. Land and structures. IV. Shares in the entity held by the entity.

2. Plant and machinery, tools, furniture and other

tangible assets. 109.000

V. Prior years' income.

3. Tangible fixed assets in progress and advances. 1. Non-distributed income.

III. Investment property. 2. (Prior years' negative income). - 5.000

1. Land. 30.000 VI. Other owners' contributions.

2. Structures. 65.000 VII. Income for the year. 30.000

IV. Long-term investments in subsidiaries and

associated companies. VIII. (Dividends paid in advance).

1. Holdings in equity. IX. Other equity instruments.

2. Loans to companies. A-2) Adjustments for changes in value.

3. Debt instruments. I. Financial instruments available for sale. - 25.000

4. Derivative financial instruments. II. Hedging operations.

5. Other financial assets. III. Other.

V. Long-term financial investments. A-3) Grants, donations and legacies received.

[PDF] ESCUELA UNIVERSITARIA DE ESTUDIOS EMPRESARIALES