Question

The following information is provided for the company ‘Logistic One-4-All’ (figures
are in euro):
Common stock ?
Trade and other accounts receivable 135,000
Wages payable 25,000
Temporary investments 40,000
Debtors 35,000
Interest expense 10,000
Opening inventory 35,000
Goodwill 45,000
Sales 740,000
Creditors 97,000
Other long-term liabilities 20,000
Other non-currents liabilities 13,000
Cash and cash equivalents 77,000
Purchases 560,000
Land 120,000
Interest revenue 5,000
Equipment 55,000
Beginning Retained Earnings 25,000
Acquired intangible assets 15,000
Bank overdraft (short-term borrowing) 15,000
Sales discounts 40,000
Selling, general and administrative expenses 70,000
Long-term marketable securities 35,000
Long-term debt 90,000
Closing inventory 85,000
Current period’s retained earnings ?
Taxes payable 33,000
Buildings 210,000
Purchases returns 10,000
Net Income ?

The Current period’s retained earnings are calculated as follows:
Current period’s retained earnings = Beginning Retained Earnings + Net Income -
Dividends.
Also, consider that there is no taxation and no decision for dividends distribution.
Using this information, you are required to:

a. Prepare the balance sheet (with the categories: Current Assets, Noncurrent Assets,
Total Current Liabilities, Total Noncurrent Liabilities and Stockholders’ Equity) and
the income statement for the company ‘Logistic One-4-All’.

Answer 1

Logictics One-4 all
Income Statement
for the year ended
Particulars	Amount
Sales (Sales- Sales Discount)	700000
Interest Revenues	5000
Total Revenue	705000
Less: Cost of Goods Sold                                                    ( Purchases+Opening Inventory-Closing inventory)	510000
Gross profit	195000
Less: Expenses
Wages Payable	25000
Interest Expense	10000
Selling General And Administrative Expenses	70000
Total Expenses	105000
Net Profit before Tax	90000
Less: Tax payable	33000
Net Profit	57000

Logictics One-4 all
Balance Sheet
for the year ended
Particulars	Amount
Non Current Assets
Goodwill	45000
Land	120000
Equipment	55000
Intangible Assets	15000
Long term Marketable Securities	35000
Buildings	210000
Total Non Current Assets [A]	480000
Current Assets
Trade & Other Accounts Receivable	135000
Temporary Investments	40000
Debtors	35000
Cash & Cash Equivalents	77000
Closing Inventory	85000
Total Current Assets [B]	372000
Total Assets [A+B]	852000
Shareholders Equity and Liabilities
Non Current Liabilities
Long Term Debt	90000
Other Non Current Liabiliies	13000
Other Long Term Liabilities	20000
Total Non Current Liabilities(a)	123000
Current Liabilities
Creditors	97000
Bank Overdraft	15000
Wages Payable	25000
Tax Payable	33000
Total Current Liabilities(b)	170000
Shareholder's Equity
Share Capital	467000
Retained Earning	92000
Total Shareholder's Equity (c)	559000
Total Shareholder's Equity and Liabilities(a+b+c)	852000

Common Stock is the Balancing figure i.e= Total assets- total Current liabilities- total Non Current liabilities-Retained Earning

=852000- 170000-123000-92000

=467000

Current Period Retained Earning=Beginning Retained Earnings + Net Income -Dividends.

=25000+67000-0

=92000

Net Income is 67000 as per Income Statement.