Question

In: Accounting

Task 1 Calculate the initial value of capital in an Ltd. (limited liability) company, if net...

Task 1
Calculate the initial value of capital in an Ltd. (limited liability) company, if
net profit of the previous year was 160,000 it has fixed assets of 800,000 at
its disposal (machinery – 500,000 and vehicles – 300,000), but the properties are
partly depreciated (machinery depreciation is 100,000 while vehicles 150,000).
The entity owns 120,000 worth of finished goods in a warehouse as well as nonfinished
goods worth 40,000. The company is behind in payment of contributions
to the National Health Service and to the Tax Office by a total of 16,000.
The company took a bank loan in the value of 300,000, and it has 10,000 in its
bank account.
Task 2
Explain which of the business events below not economic operations are:
5) payment of ZUS contributions by the employer,
6) contract with client to built a warehouse,
7) selling the finished goods – VAT invoice has been issued,
8) sending an offer of products to clients,
10) product packaging costs incurred,
11) cost of product transport to clients incurred
12) release of goods from stock

Solutions

Expert Solution

Dear student, we cannot able to post solution more than one question as per our policy.

Balance sheet
Assets
Bank balance      10,000
Finished goods    120,000
Nonfinished
goods
     40,000
Net Fixed assets (800000-(100000+150000))    550,000
Total assets    720,000
Liabilities and owner's eqiuity
Liabilities
Other payables      16,000
Bank loan    300,000
Total liabilities    316,000
owner's eqiuity (160000+244000)    404,000
Total liabilities and owner's eqiuity    720,000

As per accounting equation, Assets = liabilities + owner's equity

Assets       720,000
Less: liabilities       316,000
Total owner's eqiuity at ending       404,000
Total owner's eqiuity at ending       404,000
Less: net profit of the previous year       160,000
Initial value of capital         244,000

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