Computer software development firm

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Reference no: EM131947523

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.

Reference no: EM131947523

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