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Tuesday, August 3, 2010

Valix Finacc vol 1 Problem 2-1

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 2-1


Easy Company
Statement of Financial Position
December 31, 2008

A S S E T S


Current assets:                                                             Note
   Cash and cash equivalents                                                 800,000
   Accounts receivable                                                                        450,000
   Inventories                                                                                        900,000
   Prepaid expenses                                                       (1)                  200,000
       Total current assets                                                                                         2,350,000  
Noncurrent assets:
   Property, plant and equipment                                 (2)               4,400,000
   Long-term investments                                                                     950,000
   Intangible asset                                                          (3)                  800,000
       Total noncurrent assets                                                                                  6,150,000
Total assets                                                                                                           8,500,000

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
   Trade and other payables                                          (4)                 450,000
   Note payable, short-term debt                                                       200,000
       Total current liabilities                                                                                      650,000
Noncurrent liabilities:
   Mortgage payable, due in 5 years                                               1,500,000
   Note payable, long-term debt                                                       500,000
       Total noncurrent liabilities                                                                             2,000,000
Shareholders’ equity:
   Share capital, P100 par                                                                4,000,000
   Share premium                                                                                500,000
   Retained earnings                                                                        1,350,000
       Total shareholders’ equity                                                                             5,850,000
Total liabilities and stockholders’ equity                                                              8,500,000

                                                                                                                       

Note 1 - Prepaid expenses                                   

Office supplies                                                                                           50,000
Prepaid rent                                                                                                        150,000
Total prepaid expenses                                                                                       200,000


                                                                                                                6
                                                                                                         
Note 2 - Property, plant and equipment                    

Property, plant and equipment                                                                      5,600,000
Accumulated depreciation                                                                            (1,200,000)
Net book value                                                                                               4,400,000


Note 3 - Intangible asset

Patent                                                                                                                800,000


Note 4 - Trade and other payables

Accounts payable                                                                                              350,000
Accrued expenses                                                                                              100,000
Total                                                                                                                   450,000

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