S192 B003 Basics of Accounting

2014-10-06

Exercises (3)
3.1
Complete the columns to show the effects of the following transactions:

Assets
A
B
C
D
E
F
G
H
I
J

Effects upon
Capital

Liabilities

Bought goods on account 400 Eur
Jonas lends the firm 5 000 Eur
We return goods for 50 Eur to a supplier whose account was still outstanding
We pay a creditor 330 Eur
The owner of the business introduces 5 000
Eur into the firm by cash
Bought computer for 880 Eur for the office use paying cash
A debtor pays us in cash 77 Eur
We paid insurance in advance for 6 months,
300 Eur.
We received a bank loan (10 000 Eur) for 3 years A part of bank loan (5 000 Eur) was repaid

3.2
Your task is to determine when to register revenues, expenses, cash inflows and outflows. Show the effects of each transaction. No.
Transaction
1.
We received 1 200 Eur for services not yet performed.
2.
We received 700 Eur for products. The products are still in our warehouse, but they are prepared to be sold.
3.
We received 1 120 Eur for products which were taken by our customer immediately. 4.
The products that were paid for in transaction No. 2 were taken.
5.
Services that were paid for in transaction No. 1 were performed.
6.
A new customer ordered products.
7.

8.

Revenues

Expenses

Inflows

Outflows

Effects upon

We received 12 000 Eur for the building (rent in advance). We rented the building for 1 year.
1 month passed after the building was rented. 1

S192 B003 Basics of Accounting
9.
We received 9 000 Eur long-term bank loan. 10. We sold production for 600 Eur, the customer should pay in 3 business days. 11. We received 600 Eur debt from our customer (see transaction No. 10).
12. We sold production for 900 Eur, the customer paid 500 Eur immediately and should pay the rest of the amount in 6 business days.
13. We paid 800 Eur for the production bought. 14. We calculated wages and salaries,
3 200 Eur.
15. The wages and salaries, that were calculated in transaction No. 14 were paid. 16. We bought production for 2 370 Eur, on account. We should pay the suppliers in 10 business days.
17. We paid debt for production (see transaction No. 16).
18. We calculated 490 Eur interest for the bank loan.
19. We paid back bank loan (9 000 Eur) and interest (490 Eur).
20. We bought machinery for 7 000 Eur.
21.
22.
23.
24.

2014-10-06

We calculated depreciation for the machinery, 40 Eur.
We bought production for 300 Eur and paid for it the same day.
We received 120 Eur bill for electricity. We paid 120 Eur for the electricity (see transaction No. 23)

3.3
You are given the transactions of LLC “Austėja“, 201X, June:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

06.05 V. Pavardenis started business and put 18 000 Eur into a bank account for the business;
06.09 bank gave V. Pavardenis a long term loan of 20 000 Eur;
06.09 purchased machinery for 9 000 Eur;
06.10 LLC “Austeja” purchased raw materials for 5 000 Eur on account. LLC “Austeja” has to pay for the suppliers in 20 d.;
06.17 company bought a car for 12 000 Eur;
06.20 earned revenue for produced and sold goods 6 500 Eur;
06.20 used up raw materials for the production of goods - 4 000 Eur;
06.22 paid for the raw materials, purchased on June 10;
06.22 purchased a mobile phone for 500 Eur;
06.27 purchased raw materials for 4 500 Eur on account;
06.27 sold production for 6 700 Eur on account (earned revenue);
06.28 paid 8 500 Eur salaries and wages, June;
06.30 paid 100 Eur for phone calls, June;
06.30 our customers paid a part of the debt, 2 700 Eur, for the production bought on 27th of June;
2

S192 B003 Basics of Accounting

2014-10-06

Your task is to fill the table (1), write the accounting equation after 10 transactions (2), prepare the Income Statement
(3) and the Balance Sheet (4).

No.
=

+

+Reve nues -Expen ses 1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

11.
12.
13.
14.
Total:
Assets, total:

Equity and liabilities, total:

The accounting equation after 10 transactions: