Objectives

Practice with basic accounting standards by making Objectives

Practice with basic accounting standards by making some simple accounting entries.

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The company me&me S.A. shows the following balance sheet on December 31st, 2010, in thousands of um.

1,000 Patents Corporate capital 100,000

5,000 Computer Applications Legal Reserve 10,000

45,000 Natural Lands and Property Statutory Reserve 7,000

60,000 Buildings Voluntary Reserves 8,000

7,000 Tools Official capital subsidies 3,000

12,000 Inf. Processing Equipment Fund for environmental situations 9,000

28,000 Transportation elements Short-term bank debts 8,500

10,000 Doubtful long-term credits Fixed Intangible Accumulated Amort. 2,500

4,000 Merchandise Fixed Tangible Accumulated Amort. 57,000

5,700 Clients Impairment in value of l.-t. credits 10,000

9,000 Comm. effects in portfolio Merchandise impairment 1,000

4,800 Debtors ($40,000) Suppliers 7,000

7,000 I.F.T. in capital H.P. creditor for tax items 1,500

4,000 Short term deposits

700 Cash

16,800 Banks C/A

4,000 Banks, savings account

224,000 224,000

Operations carried out by me&me S.A. that have not yet been accounted for in the year 2010 were the following:

1.me&me S.A. acquires goods on credit for 5,200,000 um with a discount on the final bill of 100,000 um due to the volume of the request.

2. On land owned by me&me S.A., the construction of a building was begun. The construction company was paid 7,000,000 um.

3. me&me S.A. pays for changes to its yards by charging the environmental provisions fund 3,000,000 um.

4. The company sells 7,500,000 um worth of merchandise on credit. Transportation expenses paid by me&me S.A. are 300,000 um. The operation is documented with a bill of exchange. me&me S.A. discounts, or does the factoring of the bill, bank expenses 150,000 um, interest 250,000 um.

5. On the expiration of the old bill, the client pays the amount of the bill.

6. me&me S.A. receives two new sources of financing.

7. An enlargement of capital for which the partners receive 10,000,000 um and public financing of 6,000,000 um at an interest rate of 1%. The financing is received on November 1st and is for two years. The interest is not paid until the loan is finalized.

8. me&me S.A. has 4,000 temporary investment actions in MOCO, S.A., with a nominal value of 1.000 um and sells them for cash at 275%.

9. From December 1st on, a deal is made with the construction company that 10,000,000 um will be paid within 2 months and me&me, S.A. will receive the building in operating conditions.

10. Of the long-term provisioned credit that is part of the balance sheet, me&me S.A. is able to collect 70% of it; the rest is considered bad.

11. me&me, S.A. sells a property that is totally subsidized by the municipality for 4,500,000 um, non-refundable.

12. me&me S.A. pays 600,000 umto rent space for December of this year and January of the next.

13. The acquisition price of the final inventory of merchandise is 5,700,000 um. The realization value of this inventory is 6,000,000 um with commercialization expenses of 100,000 um.

14. me&me S.A. performs the following debt repayments on December 31, 1997: The fixed tangible assets are as follows:

- The computers acquired on January 1st, 2009, with a lifespan of 3 years, no residual value, according to the regressive number digits method.

- The remainder of the fixed tangible assets is 20% of its net book value.

- The intangible assets have a useful life of 4 years, according to the linear method.

- The intangible assets have a reasonable value of 10% less than their net book price at closing.

15. The business pays the short-term debt with the bank, paying 1,000 um in yearly interest, which corresponds to the period understood to be between January and December 1st. On December 1st, a loan is requested, to be paid over eight years in monthly payments of equal amounts at a yearly interest rate of 2%. On December 31st, the first fee is paid along with the corresponding interest.

16. At the close of the fiscal year, the price of the dollar is 140 um/$. me&me S.A. Draw up the accounting entries for fiscal year 2010, the regularization and closure, and develop the balance sheet, the income sheet, the cash-flow sheet, and the net worth status.ome simple accounting entries.