DEPARTAMENTO DE CONTABILIDAD Y ECONOMÍA FINANCIERA
ESCUELA UNIVERSITARIA DE ESTUDIOS EMPRESARIALES
FINANCIAL ACCOUNTING
(DIPLOMATURA EN CIENCIAS EMPRESARIALES, 2º CURSO, GRUPO 5)
2008-2009
BALANCE 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
Long-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
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.
EXERCISE 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
(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: ¾ Book value (1/1/2007): 42,000 ¾ Market value (31/12/200X): 50,000 • Holdings in company B: ¾ Book value (1/1/2007): 173,000 ¾ 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
SOLUTION
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
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 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:
¾ Book value (1/1/2008): 200,000
¾ 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
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.
1. Holdings in equity. 175.000 B) NON-CURRENT LIABILITIES
2. Loans to companies. 20.000 I. Long-term provisions.
3. Debt instruments. 1. Provisions for long-term employee benefits.
4. Derivative financial instruments. 2. Environmental actions. 20.000
5. Other financial assets. 100.000 3. Provisions for reestructuring.
VI. Deferred tax assets. 4. Other provisions.
II. Long-term debt.
B) CURRENT ASSETS 1. Debentures and other negotiable securities.
I. Non-current assets held for sale. 2. Long-term debt payable to credit institutions. 120.000
II. Inventories. 3. Long-term debt from leasing contracts.
1. Commercial (goods for sale). 5.000 4. Derivative financial instruments.
2. Raw materials and other supplies. 5. Other financial liabilities.
3. Work-in process. III. Long-term debt payable to subsidiaries and associated companies.
4. Finished goods. IV. Deferred tax liability.
5. Auxiliary products, consumables and replacements. V. Long-term accrual accounts.
6. Advances to suppliers. 5.000
III. Trade accounts receivables and other
receivables. C) CURRENT LIABILITIES
1. Trade accounts receivables for sale and services. 90.000 I. Liabilities linked to non-current assets held for sale 2. Accounts receivables from subsidiaries and
associated companies. II. Short-term provisions.
3. Sundry accounts receivables. III. Short-term debt.
4. Employee receivables. 1. Debentures and other negotiable securities.
5. Assets for current tax. 2. Short-term debt payable to credit institutions. 8.000
7. Called subscribed capital receivable. 4. Derivative financial instruments. IV. Short-term investments in subsidiaries and
associated companies. 5. Other financial liabilities. 2.000
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. 150.000
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.
1. Holdings in equity. 20.000 5. Liability for current tax. 7.000
2. Loans to companies. 6.000 6. Other payables to public authorities. 27.000
3. Debt instruments. 7. Customer advances. 10.000
4. Derivative financial instruments. VI. Short term accrual accounts. 5.000
5. Other financial assets.
VI. Accrual accounts. 35.000
VII. Cash and cash equivalents.
1. Cash. 40.000
2. Cash equivalents. 4.000
TOTAL ASSETS 884.000 TOTAL LIABILITIES 884.000
