DEPARTAMENTO DE CONTABILIDAD Y ECONOMA FINANCIERA

ESCUELA UNIVERSITARIA DE ESTUDIOS EMPRESARIALES

FINANCIAL ACCOUNTING
(DIPLOMATURA EN CIENCIAS EMPRESARIALES, 2 CURSO, GRUPO 5)

2008-2009

EXERCISES LESSON 3
BALANCE SHEET

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.

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

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

(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:
Book value (1/1/2007):
42,000
Market value (31/12/200X):
50,000
Holdings in company B:
Book value (1/1/2007):
173,000
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.

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

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

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:
Book value (1/1/2008):
200,000
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

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