DEPARTAMENTO DE CONTABILIDAD Y ECONOMÍA FINANCIERA ESCUELA UNIVERSITARIA DE ESTUDIOS EMPRESARIALES FINANCIAL ACCOUNTING (DIPLOMATURA EN CIENCIAS EMPRESARIALES, 2º CURSO, GRUPO 5) 2008-2009 EXERCISES LESSON 3 BALANCE SHEET 1 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 Accounts payable for services Accounts receivable, bill of exchange Accumulated depreciation of constructions Advances to suppliers Called subscribed capital receivable Capital grants Capital stock Cash Cash equivalents Constructions Expenses paid in advance Impairment of constructions Impairment of inventories of other supplies Income for the year Interest payable to credit institutions Inventories of other supplies Land Provisions for other responsibilities Salary paid in advance Short-term debt with credit institutions Short-term holdings in equity VAT payable 132,000 40,000 10,000 30,000 12,000 3,000 40,000 150,000 84,150 500,000 120,000 5,500 6,000 400 308,750 3,000 1,500 140,000 20,000 3,000 150,000 6,000 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 2 Long-term debt with credit institutions Other owners’ contributions Vehicles Computers Inventories of goods for sale Short-term deposits and guarantees given Expenses paid in advance Payable to public authorities (withholdings) Receivable from public authorities (income tax refund) Interest payable to credit institutions Interest receivable Furniture Income for the year Intellectual property Accounts payable for goods Provisions for environmental actions Prior years’ negative income Legal reserve Uncalled subscribed capital receivable Capital grants 2,000 200 4,000 2,000 1,000 500 270 220 50 10 50 5,200 1,925 4,000 50 500 300 1,600 5,000 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 A) NON-CURRENT ASSETS I. Intangible assets. 1. Research and development. 2. Administrative concesions. 3. Intelectual property, trademarks and others. 4. Goodwill. 5. Computer software. 6. Other intangible assets. II. Tangible fixed assets. 1. Land and structures. 2. Plant and machinery, tools, furniture and other tangible assets. 3. Tangible fixed assets in progress and advances. III. Investment property. 1. Land. 2. Structures. IV. Long-term investments in subsidiaries and associated companies. 1. Shares and long-term holdings in equity of subsidiaries and associated companies. 200X 3.050 2.700 10.700 300 1.800 LIABILITIES A) EQUITY A-1) Shareholders' equity. I. Capital. 1. Registered capital. 2. (Uncalled subscribed capital). II. Additional paid-in capital. III. Reserves. 1. Legal and statutory. 2. Other reserves. IV. (Shares in the entity held by the entity). 200X 21.000 - 5.000 1.600 - 1.000 V. Prior years' income. 1. Non-distributed income. 2. (Prior years' negative income). VI. Other owners' contributions. VII. Income for the year. - 300 200 1.925 VIII. (Dividends paid in advance). IX. Other equity instruments. 3 2. Long-term loans to subsidiaries and associated companies. 3. Other long-term investments. V. Long-term financial investments. 1. Shares and long-term holdings in equity. 2. Long-term credits to companies. 3. Other long-term financial investments. VI. Deferred tax assets. B) CURRENT ASSETS I. Non-current assets held for sale. II. Inventories. 1. Commercial (goods for sale). 2. Raw materials and other supplies. 3. Work-in process. A-2) Adjustments for changes in value. 2.500 900 4. Finished goods. 5. Auxiliary products, consumables and replacements. 6. Advances to suppliers. III. Trade accounts receivables and other receivables. 1. Trade accounts receivables for sale and services. 2. Accounts receivables from subsidiaries and associated companies. 3. Sundry accounts receivables. 4. Employee receivables. 5. Assets for current tax. 6. Other receivables from public authorities. 7. Called subscribed capital receivable. IV. Short-term investments in subsidiaries and associated companies. 1. Shares and short-term holdings in equity of subsidiaries and associated companies. 2. Short-term loans to subsidiaries and associated companies. 3. Other short-term investments. V. Short-term financial investments. 1. Shares and short-term holdings in equity. 2. Short-term credits to companies. 3. Short-term derivative financial instruments. 4. Other short-term financial investments. VI. Accrual accounts. VII. Cash and cash equivalents. 1. Cash. 2. Cash equivalents. TOTAL ASSETS 200 50 550 500 270 1.355 24.875 I. Financial instruments available for sale. II. Hedging operations. III. Other. A-3) Grants, donations and legacies received. B) NON-CURRENT LIABILITIES I. Long-term provisions. 1. Provisions for long-term employee benefits. 2. Environmental actions. 3. Provisions for reestructuring. 4. Other provisions. II. Long-term debt. 1. Debentures and other negotiable securities. 2. Long-term debt payable to credit institutions. 3. Other (deposits and guarantees, bills of exchange, etc.). III. Long-term debt payable to subsidiaries and associated companies. IV. Deferred tax liability. C) CURRENT LIABILITIES I. Liabilities linked to non-current assets held for sale. II. Short-term provisions. III. Short-term debt. 1. Debentures and other negotiable securities. 2. Short-term debt payable to credit institutions. 3. Short-term derivative financial instruments. 4. Other (deposits and guarantees, bills of exchange, etc.). IV. Short-term debt payable to subsidiaries and associated companies. 1. Debt payable to subsidiaries and associated companies. 2. Subscribtions to share capital called. V. Trade accounts payable and other payable. 1. Trade accounts payable for purchases and services. 2. Accounts payable to subsidiaries and associated companies. 3. Sundry accounts payable. 4. Salary payable. 5. Liability for current tax. 6. Other payable to public authorities. 7. Customer advances. VI. Accrual accounts. TOTAL LIABILITIES 50 1.500 500 2.000 2.010 50 20 220 100 24.875 4 EXERCISE 3 (LESSON 3) The following list of accounts for Company Y Ltd. is available at the end of 200X. ACCOUNT Accounts payable for goods Accounts payable for services Accounts receivable Accumulated depreciation of intangible assets Accumulated depreciation of tangible fixed assets and investment property (1) Additional paid in capital Advances to suppliers Capital grants Capital stock Cash Computer hardware Computer software Containers and packaging returnable by customers Dividend receivable Doubtful accounts receivable Furniture Goodwill Impairment of accounts receivables Impairment of inventories of goods for sale Impairment of investment property (land) Income for the year (profits) Interest payable Inventory of goods for sale Investments in constructions Investments in land Long term credits to employees Long term debt with credit institutions Long term deposits in financial institutions Long term deposits and guarantees received Long term holdings in equity (initial balance) (2) Payable to public authorities (Income tax) Payable to public authorities (social security) Payable to public authorities (VAT) Provision for other responsibilities Revenues received in advance Short term credits Short term debt with credit institutions Short term debt with suppliers of fixed assets Short term holdings in equity Sundry accounts receivables Uncalled subscribed capital receivable Vehicles Voluntary reserve • AMOUNT 170,000 80,000 95,000 40,000 80,000 30,000 5,000 45,000 300,000 2,000 130,000 90,000 20,000 18,000 12,000 25,000 200,000 12,000 3,000 15,000 45,000 1,000 38,000 100,000 60,000 40,000 120,000 70,000 75,000 215,000 10,000 18,000 29,000 120,000 35,000 6,000 36,000 12,000 150,000 55,000 75,000 180,000 270,000 The breakdown of the accumulated depreciation is the following: (1) Furniture: 5,000 (2) Computer hardware: 25,000 5 (3) Vehicles: (4) Investments in constructions: • • • 30,000 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 Accounts receivable, bill of exchange 118.600 Short term debt with credit institutions from the discounting of bills of exchange 46.400 Salary payable 800 Adjustments for changes in value of financial instruments available for sale 2.550 Salary paid in advance 2.100 Capital stock 370.000 Uncalled subscribed capital receivable 20.000 Legal reserve 50.000 Accumulated depreciation of intangible assets 2.400 Accumulated depreciation of tangible fixed assets (1) 80.000 Impairment of plant and equipment 8.590 Called subscribed capital receivable 1.260 Cash 146.060 Machinery classified as held for sale 30.000 Debt with suppliers of fixed assets (of the machinery held for sale) 10.000 Accounts payable 7.800 Long term holdings in equity 7.000 Impairment of inventory of finished goods 600 Short term debt with credit institutions 29.890 Interest payable to credit institutions 600 Long-term debt payable to suppliers of fixed assets 48.920 Voluntary reserve 103.881 Short-term debt payable to suppliers of fixed assets 11.420 Computer software10.000 Constructions 460.000 Machinery 200.000 Plant and equipment 100.000 Inventory of raw materials 2.100 Inventory of finished goods 8.100 Inventory of work-in process 2.700 Capital grants 5.600 Provision for other responsibilities 95.000 Payable to public authorities (Income Tax) 49.855 Expenses paid in advance 1.800 Payable to public authorities (VAT) 10.400 Income for the year ¿? (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. 6 SOLUTION ASSETS A) NON-CURRENT ASSETS I. Intangible assets. 1. Development. 2. Administrative concesions. 3. Intelectual property, trademarks and others. 4. Goodwill. 5. Computer software. 200X 7.600 6. Other intagible assets. II. Tangible fixed assets. 1. Land and structures. 2. Plant and machinery, tools, furniture and other tangible assets. 3. Tangible fixed assets in progress and advances. III. Investment property. 1. Land. 2. Structures. IV. Long-term investments in subsidiaries and associated companies. 1. Holdings in equity. 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. V. Long-term financial investments. 1. Holdings in equity. 410.000 261.410 200X - 370.000 20.000 III. Reserves. 1. Legal and statutory. 2. Other reserves. IV. (Shares and holding in equity of the company/Shares in the entity held by the entity). 50.000 103.881 V. Prior years' income. 1. Non-distributed income. 2. (Prior years' negative income). VI. Other owners' contributions. VII. Income for the year. 171.864 VIII. (Dividends paid in advance). IX. Other equity instruments. A-2) Adjustments for changes in value. I. Financial instruments held for sale. II. Hedging operations. III. Other. A-3) Grants, donations and legacies received. 7.000 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. VI. Deferred tax assets. B) CURRENT ASSETS I. Non-current assets held for sale. II. Inventories. 1. Commercial (goods for sale). 2. Raw materials and other supplies. LIABILITIES A) EQUITY A-1) Shareholders' equity. I. Capital. 1. Registered capital. 2. (Uncalled subscribed capital). II. Additional paid-in capital (share premium). 30.000 2.100 3. Work-in process. 2.700 4. Finished goods. 5. Auxiliary products, consumables and replacements. 6. Advances to suppliers. III. Trade accounts receivables and other receivables. 1. Trade accounts receivables for sale and services. 2. Accounts receivables from subsidiaries and associated companies. 3. Sundry accounts receivables. 4. Employee receivables. 5. Assets for current tax. 6. Other receivables from public authorities. 7. Called subscribed capital receivable. 7.500 2.550 5.600 B) NON-CURRENT LIABILITIES I. Long-term provisions. 1. Provisions for long-term employee benefits. 2. Environmental actions. 3. Provisions for reestructuring. 4. Other provisions. II. Long-term debt. 1. Debentures and other negotiable securities. 2. Long-term debt payable to credit institutions. 3. Long-term debt from leasing contracts. 4. Derivative financial instruments. 3. Other financial liabilities. III. Long-term debt payable to subsidiaries and associated companies. IV. Deferred tax liability. 95.000 48.920 V. Long-term accrual accounts. C) CURRENT LIABILITIES 118.600 I. Liabilities linked to non-current assets held for sale 10.000 II. Short-term provisions. 2.100 1.260 III. Short-term debt. 1. Debentures and other negotiable securities. 2. Short-term debt payable to credit institutions. 3. Short-term debt from leasing contracts. 4. Derivative financial instruments. 76.890 7 IV. Short-term investments in subsidiaries and associated companies. 3. Other financial liabilities. IV. Short-term debt payable to subsidiaries and associated companies. V. Trade accounts payables and other payables. 1. Trade accounts payables for purchases and services. 2. Accounts payables to subsidiaries and associated companies. 3. Sundry accounts payable. 4. Salary payable. 5. Liability for current tax. 6. Other payables to public authorities. 7. Customer advances. VI. Short term accrual accounts. 1. Holdings in equity. 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. V. Short-term financial investments. 1. Holdings in equity. 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. VI. Accrual accounts. VII. Cash and cash equivalents. 1. Cash. 2. Cash equivalents. TOTAL ASSETS 11.420 7.800 800 49.855 10.400 3.150 1.800 146.060 998.130 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 Accounts payable for services Accounts receivable Additional paid-in capital Advances from customers Advances to suppliers Capital stock Cash Cash equivalents Computer hardware Computer software Development Doubtful accounts receivable Expenses paid in advance Furniture Impairment of inventory of goods for sale Impairment of investments in constructions Impairment of tangible fixed assets (machinery) Impairment of trade accounts receivable Income for the year (profits) Intangible fixed assets accumulated depreciation (2) Intellectual property Interest payable to credit institutions Inventory of goods for sale Investments in constructions Investments in land Legal reserve Long term credits to employees Long term deposits in financial institutions Long term guarantees given 70,000 80,000 90,000 10,000 10,000 5,000 500,000 40,000 4,000 70,000 5,000 200,000 2,000 35,000 25,000 3,000 15,000 6,000 2,000 30,000 80,000 55,000 2,000 8,000 80,000 30,000 85,000 10,000 75,000 25,000 8 Long-term credit with buyers of tangible fixed assets Long-term debt with credit institutions Long-term holdings in equity (3) Machinery Payable to public authorities (Income Tax) Payable to public authorities (social security) Payable to public authorities (VAT) Prior years negative income Provision for environmental actions Revenues received in advance Short term credits Short-term debt with credit institutions Short-term debt with suppliers of fixed assets Short-term holdings in equity Tangible fixed assets accumulated depreciation (1) Uncalled subscribed capital receivable Vehicles 10,000 120,000 200,000 20,000 7,000 18,000 9,000 5,000 20,000 5,000 6,000 6,000 2,000 20,000 30,000 60,000 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 25,000 (133) Adjustments for to changes in value of financial instruments held for sale to (250) Long-term holdings in equity instruments 25,000 (800) Losses from available 25,000 for sale financial assets 9 ASSETS A) NON-CURRENT ASSETS I. Intangible assets. 1. Development. 2. Administrative concesions. 3. Intelectual property, trademarks and others. 4. Goodwill. 5. Computer software. 6. Other intagible assets. II. Tangible fixed assets. 1. Land and structures. 2. Plant and machinery, tools, furniture and other tangible assets. 3. Tangible fixed assets in progress and advances. III. Investment property. 1. Land. 2. Structures. IV. Long-term investments in subsidiaries and associated companies. 1. Holdings in equity. 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. V. Long-term financial investments. 1. Holdings in equity. 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. VI. Deferred tax assets. B) CURRENT ASSETS I. Non-current assets held for sale. II. Inventories. 1. Commercial (goods for sale). 2. Raw materials and other supplies. 3. Work-in process. 4. Finished goods. 5. Auxiliary products, consumables and replacements. 6. Advances to suppliers. III. Trade accounts receivables and other receivables. 1. Trade accounts receivables for sale and services. 2. Accounts receivables from subsidiaries and associated companies. 3. Sundry accounts receivables. 4. Employee receivables. 5. Assets for current tax. 6. Other receivables from public authorities. LIABILITIES A) EQUITY A-1) Shareholders' equity. 142.000 I. Capital. 1. Registered capital. 35.000 2. (Uncalled subscribed capital). II. Additional paid-in capital (share premium). 3.000 III. Reserves. 1. Legal and statutory. 2. Other reserves. IV. Shares in the entity held by the entity. 200X 200X 500.000 - 60.000 10.000 85.000 109.000 V. Prior years' income. 30.000 65.000 1. Non-distributed income. 2. (Prior years' negative income). VI. Other owners' contributions. VII. Income for the year. - 5.000 30.000 VIII. (Dividends paid in advance). IX. Other equity instruments. A-2) Adjustments for changes in value. I. Financial instruments available for sale. II. Hedging operations. III. Other. A-3) Grants, donations and legacies received. 175.000 B) NON-CURRENT LIABILITIES 20.000 I. Long-term provisions. 1. Provisions for long-term employee benefits. 2. Environmental actions. 100.000 3. Provisions for reestructuring. 4. Other provisions. II. Long-term debt. 1. Debentures and other negotiable securities. 2. Long-term debt payable to credit institutions. 3. Long-term debt from leasing contracts. 5.000 4. Derivative financial instruments. 5. Other financial liabilities. III. Long-term debt payable to subsidiaries and associated companies. IV. Deferred tax liability. V. Long-term accrual accounts. 5.000 - 25.000 20.000 120.000 C) CURRENT LIABILITIES 90.000 I. Liabilities linked to non-current assets held for sale II. Short-term provisions. III. Short-term debt. 1. Debentures and other negotiable securities. 2. Short-term debt payable to credit institutions. 3. Short-term debt from leasing contracts. 8.000 10 7. Called subscribed capital receivable. IV. Short-term investments in subsidiaries and associated companies. 4. Derivative financial instruments. 5. Other financial liabilities. 1. Holdings in equity. 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. V. Short-term financial investments. 1. Holdings in equity. 2. Loans to companies. 3. Debt instruments. 4. Derivative financial instruments. 5. Other financial assets. VI. Accrual accounts. VII. Cash and cash equivalents. 1. Cash. 2. Cash equivalents. TOTAL ASSETS 20.000 6.000 2.000 IV. Short-term debt payable to subsidiaries and associated companies. V. Trade accounts payables and other payables. 1. Trade accounts payables for purchases and services. 2. Accounts payables to subsidiaries and associated companies. 3. Sundry accounts payable. 4. Salary payable. 5. Liability for current tax. 6. Other payables to public authorities. 7. Customer advances. VI. Short term accrual accounts. 150.000 7.000 27.000 10.000 5.000 35.000 40.000 4.000 884.000 TOTAL LIABILITIES 884.000 11