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Accounting Fundamentals Practice

Nicro-Soft Inc issued 1 million common shares in Year 1. It borrowed $450,000 and purchased $900,000 of property and plant. It paid operating expenses of $63,000 and taxes of $45,000. Net income was $105,000. In Year 2, Nicro-Soft repaid $50,000 of its loan and paid interest of $34,000. It purchased additional inventory. Operating expenses increased to $72,000 and taxes were $2,400. Net income declined to $5,600.

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30 views

Accounting Fundamentals Practice

Nicro-Soft Inc issued 1 million common shares in Year 1. It borrowed $450,000 and purchased $900,000 of property and plant. It paid operating expenses of $63,000 and taxes of $45,000. Net income was $105,000. In Year 2, Nicro-Soft repaid $50,000 of its loan and paid interest of $34,000. It purchased additional inventory. Operating expenses increased to $72,000 and taxes were $2,400. Net income declined to $5,600.

Uploaded by

alitohdezsal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 9

NICRO-SOFT INC.

Year 1 Year 2
Nicro-Soft Inc engages in the following transactions:

Issues common shares 1) 1,000,000


Borrows 2) 450,000
Repays loan 50,000 1)
Pays interest 3) 40,000 34,000 2)

Buys property and plant (estimated useful life is 10 years) 4) 900,000


70% cash 30% credit Year 1
Pays full Year 2 3)

Buys inventory 5) 310,000 420,000 4)


Cash paid for inventory 150,000 325,000

Sells inventory 6) 578,000 601,000 5)


Cash received from sales 474,000 490,000

Inventory left at year end 75,000 98,000 6)

Pays operating expenses 7) 63,000 72,000 7)

Pays tax at 30% 8) 8)

Pays a dividend 9) 30,000 1,000 9)

Requirements:

1. Produce a balance sheet and income statement for Jenga Inc for Years 1 and 2.

2. Produce the financial statements for Year 2.

Income Statement
Revenues 578,000 601,000
Cost of sales - 235,000 - 397,000
Gross profit 343,000 204,000

Expenses - 63,000 - 72,000


Depreciation - 90,000 - 90,000
Operating profit (EBIT) 190,000 42,000

Finance costs - 40,000 - 34,000


Profit before taxes 150,000 8,000

Tax at 30% - 45,000 - 2,400


Net income 105,000 5,600

Dividend - 30,000 - 1,000


Retained earnings 75,000 4,600

Balance Sheet
Assets
Current assets:
Cash 966,000 701,600
Receivables 104,000 215,000
Inventory 75,000 98,000
Prepayments
Other
Total current assets 1,145,000 1,014,600

Non-current assets
Property, plant and equipment 900,000 900,000
Depreciacion - 90,000 - 180,000
Total assets 1,955,000 1,734,600

Liabilities and shareholders' equity


Current liabilities:
Proveedores 160,000 255,000
Other accounts payable 270,000

Non-current liabilities:
Long term borrowing 450,000 400,000

Shareholder's equity:
Common shares 1,000,000 1,000,000
Retained earnings 75,000 4,600
Total liabilities and shareholders' equity 1,955,000 1,659,600

Balance Sheet Check - 75,000


Bancos Propiedad y Planta Inventario
1) 1,000,000.00 40,000.00 3) 4) 900,000.00 5) 310,000.00
2) 450,000.00 630,000.00 4)
6a) 474,000.00 150,000.00 5)
63,000.00 7)
45,000.00 8)
30,000.00 9) 900,000.00 310,000.00
1,924,000.00 958,000.00 900,000.00 900,000.00 75,000.00
966,000.00

Acredores Bancarios Proveedores Cuenta por pagar


450,000.00 2) 160,000.00 5)

450,000.00 160,000.00
450,000.00 450,000.00 160,000.00 160,000.00 270,000.00

Ventas Costo de venta Gastos de operación


578,000.00 6a) 6b) 235,000.00 7) 63,000.00

578,000.00 235,000.00 63,000.00


578,000.00 578,000.00 235,000.00 235,000.00 63,000.00

Impuestos Dividendos
8) 45,000.00 9) 30,000.00
45,000.00 30,000.00
45,000.00 45,000.00 30,000.00 30,000.00
Inventario Cuentas por cobrar
235,000.00 6b) 104,000.00 6a)

235,000.00 104,000.00
75,000.00 104,000.00 104,000.00

Cuenta por pagar Capital Social Gastos financieros


270,000.00 4) 1,000,000.00 1) 3) 40,000.00

270,000.00 1,000,000.00 40,000.00


270,000.00 1,000,000.00 1,000,000.00 40,000.00 40,000.00

Depreciacion
Gastos de operación Depreciacion de PP acumulada de pp
4.1) 90,000.00 90,000.00 4.1)

90,000.00 90,000.00
63,000.00 90,000.00 90,000.00 90,000.00 90,000.00
Bancos Propiedad y Planta
966,000.00 50,000.00 1) 900,000.00
5a) 490,000.00 34,000.00 2) 4)
270,000.00 3)
325,000.00 4)
72,000.00 7)
2,400.00 8) 900,000.00
1,000.00 9) 900,000.00 900,000.00
1,456,000.00 754,400.00
701,600.00

Acredores Bancarios Proveedores


1) 50,000.00 450,000.00 160,000.00 3)
95,000.00

50,000.00 450,000.00 255,000.00


400,000.00 400,000.00 255,000.00 255,000.00

Ventas Costo de venta


601,000.00 5a) 5b) 397,000.00 7)

601,000.00 397,000.00
601,000.00 601,000.00 397,000.00 397,000.00

Impuestos Dividendos
8) 2,400.00 9) 1,000.00
2,400.00 1,000.00
2,400.00 2,400.00 1,000.00 1,000.00
Inventario Cuentas por cobrar
75,000.00 397,000.00 5b) 104,000.00
420,000.00 111,000.00 5a)

495,000.00 397,000.00 215,000.00


98,000.00 98,000.00 215,000.00 215,000.00

Cuenta por pagar Capital Social Gastos financieros


270,000.00 270,000.00 1,000,000.00 2) 34,000.00

270,000.00 270,000.00 1,000,000.00 34,000.00


270,000.00 270,000.00 1,000,000.00 1,000,000.00 34,000.00

Depreciacion acumulada de
Gastos de operación Depreciacion de PP pp
72,000.00 4.1) 90,000.00
90,000.00

72,000.00 180,000.00
72,000.00 72,000.00 180,000.00 180,000.00 180,000.00
Gastos financieros

34,000.00

preciacion acumulada de
pp
90,000.00 4.1)
90,000.00

180,000.00
180,000.00

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