Lanni Products is a start up computer software development firm. It currently owns computer equipment worth...

Lanni Products is a start up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction?

a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years.

b. Lanni uses the cash from the bank plus 20,000 of its own funds to finance the development of new financial planning software.

c. 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 2,500 shares of Microsoft stock.

d. Lanni sells the shares of stock for $50 per share and uses part of the proceeds to pay off the bank loan.

e.Prepare its balance sheet just after it gets the bank loan. What is the ratio of real assets to total assets.

f.Prepare the balance sheet after Lanni spends the 70,000 to develop its software product. What is the ratio of real assets to total assets?

g.Prepare the balance sheet after Lanni accepts the payment of share from Microsoft.

Expert Solution

jeff jeffy answered 2 years ago

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $32,000...

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $32,000 and has cash on hand of $16,000 contributed by Lanni’s owners. Lanni takes out a bank loan. It receives $46,000 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. Assets Liabilities & Shareholders' Equity Cash Bank loan Computers Shareholders' equity Total Total a-2. What...

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $24,000...

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...

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $27,000...

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $27,000 and has cash on hand of $22,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? Lanni takes out a bank loan. It receives $38,000 in cash and signs a note promising to pay back the loan over 3 years The bank loan is...

"Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000...

"Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over 3 years. Lanni uses the cash...

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $34,000...

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $34,000 and has cash on hand of $12,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? a. Lanni takes out a bank loan. It receives $42,000 in cash and signs a note promising to pay back the loan over 3 years. The bank loan...

Imagine Chiquita owns a start up – Swanky Dog Inc. – a firm that sells high...

Imagine Chiquita owns a start up – Swanky Dog Inc. – a firm that sells high end winter coats for dogs. Dog coats sell for $80 each without deviation. She only has enough capacity in her facility to produce a maximum of 10 coats per week. The fixed costs of production are $100. The total variable costs are as follows: price quantity FC VC 80 0 100 0 80 1 100 55 80 2 100 84 80 3 100 114...

Write the “Business Plan” of the Process of International Development-Internalization of a Start-up Firm. (use the...

Write the “Business Plan” of the Process of International Development-Internalization of a Start-up Firm. (use the stages of internalization of a firm, from any sector you choose, any foreign market you choose, use the best format of “business plan” or customize for your project)

Suppose that you are invested in a software development firm that designs automotive radar software for...

Suppose that you are invested in a software development firm that designs automotive radar software for robotics systems in cars. Your offices and most of the key employees who helped to start the company are in Tampa, but given expansion plans, your current location is no longer sufficient, and you need to decide on a location for your new headquarters. Now, your business is faced with a difficult decision: where do you locate your new headquarters? Option 1: Lansing, Michigan...

Hiroole sells computer equipment and home office furniture. Currently the furniture product line takes up approximately...

Hiroole sells computer equipment and home office furniture. Currently the furniture product line takes up approximately 50 percent of the company’s retail floor space. The president of Hiroole is trying to decide whether the company should continue offering furniture or concentrate on computer equipment. Below is a product line income statement for the company. If furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of computer equipment can increase by 13 percent without affecting...

You are considering setting up a software development business. To set up the enterprise you will...

You are considering setting up a software development business. To set up the enterprise you will need to buy equipment costing $100,000. This equipment will be depreciated straight line over 5 years to a zero salvage value. Its market value at the end of the 5 years will be zero. You will need to rent space at $5,000 per year for the five years of the project. You will also need to hire 5 software engineers at $50,000 each, per...

Question