Question

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $24,000 and has cash on hand of $25,000 contributed by Lanni’s owners. Lanni takes out a bank loan. It receives $35,000 in cash and signs a note promising to pay back the loan over 3 years.

   

a-1.	Prepare the balance sheet just after it gets the bank loan. (Omit the "$" sign in your response.)

      

Assets			Liabilities & Shareholders' Equity
Cash	$		Bank loan	$
Computers			Shareholders' equity
Total	$		Total	$

       

a-2.	What is the ratio of real assets to total assets? (Round your answer to 2 decimal places.)

   

Ratio of real assets to total assets

   

b-1.	Prepare the balance sheet after Lanni spends the $60,000 to develop its software product. (Omit the "$" sign in your response.)

       

Assets			Liabilities & Shareholders' Equity
Software product	$		Bank loan	$
Computers			Shareholders' equity
Total	$		Total	$

     

b-2.	What is the ratio of real assets to total assets?

   

Ratio of real assets to total assets

  

c-1.	Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,650 shares for $78 per share. Prepare the balance sheet after Lanni accepts the payment of shares from Microsoft. (Omit the "$" sign in your response.)

      

Assets			Liabilities & Shareholders' Equity
Microsoft shares	$		Bank loan	$
Computers			Shareholders' equity
Total	$		Total	$

    

c-2.	What is the ratio of real assets to total assets? (Round your answer to 2 decimal places.)

   

Ratio of real assets to total assets

Answer 1

a-1.	Prepare the balance sheet just after it gets the bank loan. (Omit the "$" sign in your response.)

Assets		Liabilities & Shareholders' Equity
Cash	60000	Bank loan	35000
Computers	24000	Shareholders' equity	49000
Total	84000	Total	84000

a-2.	What is the ratio of real assets to total assets? (Round your answer to 2 decimal places.) =24000/84000 =.29

b-1.	Prepare the balance sheet after Lanni spends the $60,000 to develop its software product. (Omit the "$" sign in your response.) Assets Liabilities & Shareholders' Equity Software Product 60000   Bank loan 35000   Computers 24000   Shareholders' equity 49000     Total 84000     Total 84000

b-2.	What is the ratio of real assets to total assets?

=84000/84000 =1

c-1.

Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,650 shares for $78 per share. Prepare the balance sheet after Lanni accepts the payment of shares from Microsoft. (Omit the "$" sign in your response.) Assets Liabilities & Shareholders' Equity Microsoft shares 128700   Bank loan 35000   Computers 24000   Shareholders' equity 117700     Total 152700     Total 152700

c-2.	What is the ratio of real assets to total assets? (Round your answer to 2 decimal places.) 24000/152700 =.16