Reference no: EM131472348
Prepare the double (debit and credit) journal entry and the balance sheet in an excel file. No analysis needed.
1. On January 1st, X0, Company "X" is funded issuing 30.000 new shares with a nominal value of 10 €, totaling 300.000 as Common Stock. The new shareholders pay 250.000 € and give machinery & equipment to the firm valued at 50.000 €.
2. The operational startup expenses coming from legal fees and taxes are of 5.000 €.
3. a) "X" buys during the year automobile components on 1st February X0. It buys 10.000 units at 30 € per unit. Our supplier charges to "X" an output tax (sales tax) of 21%. The purchase was paid 50% in cash, and the rest on credit.
b) During the year, it sells 8.000 units at 40 € per unit. 25% of such sales have not been collected yet. The output tax (sales tax) is of 21%.
c) One month later, €75.000 of money owed to suppliers is paid.
4. "X" pays salary expenses of 30.000 €, rent for two full years, on 1st February X0 (30.000 €) (compute the full payment and then allocate the proper Rent expense for year X0). "X" has also paid utility expenses of 6.000 €.
5. On March 31st, X0, "X" issues a 200.000 € bond, at 6% annual interest rate payable semiannually (i.e., on the 30th September and 31st March), with termination in X5, and no repayment until such date. Market rate is 6%.
6. a) On 1st April, X0, "X" buys 100 Telefonica shares at 15 € per share. These will be considered as a Trading security asset.
b) On 30th June, X0, Telefonica share price is 12.5€ per share. Adjust the investment accordingly.
c) On 31st July X0, "X" sells the shares at 12 € per share.
7. Compute as of 31st December X0, the interest expenses accrued and paid referred to point 5.
8. Depreciation of the machinery is done in 5 years, using the straight line method.
9. "X" applies the allowance method to estimate potential bad debts. It has estimated that a 1% of the sales on credit will be unpaid.
10. Corporate tax rate for the period: 30%.