1. SymCorp was established in January 20xx and has been in operation for one year. Assume assets, liabilities, and owner equity were zero when the company was launched one year ago. Construct a balance sheet for SymCorp from the following transactions during the year the company has been in existence. \ a. b. c. d. e. f. g. Katie MacKenzie, a 2000 IE graduate of SDSMT, invests $400,000 to launch the business $50,000 was paid for a building site A plant was erected on the site at a cost of $500,000. Katie invested $100,000 for the building and borrowed $400,000 from the First Cayman Bank. $25,000 was used to purchase office furniture from Merillat. $25,000 was used to purchase computers, office equipment, and supplies. CNC equipment and tooling was purchased from Applied Engineering for $150,000. $40,000 of raw material inventory was purchased; $30,000 half has been paid and the remaining will come due in 30 days. a. $400,000 to launch: post $400,000 to cash and $400,000 to Capital Invest b. $50,000 for site: post $50,000 debit to cash and $50,000 credit to land c. Building: post $500,000 credit to building, $100,000 debit to cash, and $400,000 debit to loan d. $25,000 for Office Furn.: $25,000 credit to bldg; $25,000 debit to cash e. $25,000 office stuff: same as d f. CNC Equip: $150,000 credit to Equip; $150,000 debit cash g. Inventory: $40,000 credit inventory, $30,000 debit cash, $10,000 debt Accts Payable Cash 400,000 50,000 100,000 25,000 25,000 150,000 30,000 Office Supplies 25,000 25,000 50,000 400,000 20,000 Inventory 40,000 Accounts Payable 10,000 40,000 Land/Bldg/Equip 50,000 500,000 150,000 700,000 Capital Investment 400,000 10,000 Loan 400,000 400,000 Balance Sheet Current Assets Cash 20,000 Inventory 40,000 Accts Receivable 0 Total Current 60,000 Other Assets Land/Bldg/Eqp. 700,000 Office Furn/Spls 50,000 Total Assets 810,000 Liabilities Accts Payable Loan Total Liabilities Equity Capital Investment Total Liab. & O.E. 10,000 400,000 410,000 400,000 810,000 2. KB Sales is a family owned engineering consulting firm. KB records show the following amounts on hand At the end of the current year. For each account, indicate whether the account is an asset, a liability, owner equity, income, or an expense. Then prepare an income statement and balance sheet for the year end. a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. Cash on hand $ 3,000 Asset Fees received 73,000 Income Bonds owned 12,000 Asset Salary expense 28,000 Expense Equipment lease 6,000 Expense Utilities paid 5,000 Expense Capital Stock 25,000 Equity Interest from securities 3,000 Income Royalties on patents 40,000 Income Equipment (book value) 60,000 Asset Office rent 5,000 Expense Travel 4,000 Expense Supplies expense 9,000 Expense Accounts payable 20,000 Liability Accounts receivable 2,000 Asset Retained earnings 32,000 Equity Taxes 8,000 Expense Balance Sheet Current Assets Cash Acts. Recievable Total Current Bonds Equip Total Assets Liabilities Accounts Payable Equity Stock Retained Earnings Total Liab & Equity Income Statement $ 3,000 2,000 $ 5,000 12,000 60,000 $77,000 $ 20,000 $ 25,000 32,000 $ 77,000 Fees Received Royalties Income from Ops Expenses Salaries Equip Utilities Rent Travel Supplies Net From Ops Interest Income Less Taxes Net Income $ 73,000 40,000 $113,000 $ 28,000 6,000 5,000 5,000 4,000 9,000 $ 56,000 $ 3,000 8,000 $ 51,000 3. The following data are the assets, liabilities, income, expenses, and taxes for KT Designs. Prepare an income and statement and a balance sheet for the current fiscal year. a. Securities owned $200,000 Current Asset b. Accounts payable 70,000 Current Liability c. Interest from Securities 5,000 Revenue d. CAD/SW supplies/license 5,000 Asset (could be interpreted as expense) e. Real estate owned 250,000 LT Asset f. Interest expense on bank loan 3,000 Expense g. Receivables from clients 80,000 Current Asset h. Office equipment/furniture 50,000 LT Asset i. Bank Loan 150,000 LT Liability j. Travel expense 8,000 Expense k. Automobile fleet 80,000 LT Asset l. Capital stock 400,000 Owner Equity m. Cash on hand 50,000 Current Asset n. Salary expense 240,000 Expense o. Income from clients 360,000 Revenue p. Taxes 25,000 Expense Balance Sheet Assets Current Assets Cash Securities Accts Receive Total Current Long Term Real Estate Office Fleet CAD License Total Assets Current Liab Accounts Pay Long Term Liab Loan Total Liabilities Owner Equity Capital Stock Retained $ 50,000 200,000 80,000 $330,000 $250,000 50,000 80,000 5,000 $715,000 Income Statement Income from Clients Less Expenses Salaries Travel Income from operations Income from financing Interest Securities Less Bank Loan Income Less taxes Net Income $360,000 240,000 8,000 $112,000 $ 5,000 3,000 $114,000 25,000 $ 89,000 $ 70,000 150,000 $220,000 $400,000 95,000 Total Liab & OE $715,000 Since the balance sheet must balance, the difference between assets and liabilities must lie with owner equity. Since capital is given, this difference must be in retained earnings and must equal $95,000.