The following worksheet is called a Balance Sheet Equation Worksheet. The worksheet lists the key events in
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Question:
The following worksheet is called a Balance Sheet Equation Worksheet. The worksheet lists the key events in the life of UWP over years 1 through 3: each of these events is likely to affect the financial statements of UWP. The impact of the events on the UWP Balance Sheet for years 1 and 2 has been sketched out. |
a. Using the completed transactions from years 1 and 2 as a guide, fill in the worksheet for year 3. |
ASSETS | = | LIABILITIES & OWNERS' EQUITY | ||||||||||
Cash | Filters | Vehicles | Prepaid Costs | Debt | Paid-in Capital | Retained Earnings | ||||||
YEAR 1 | ||||||||||||
Beginning-of-year activities | ||||||||||||
1 | Founders' Investment, HBS Prize Money | $25,000 | $25,000 | |||||||||
2 | Alumnus Investment | $200,000 | $200,000 | |||||||||
3 | Blue Future Contract Charge | ($40,000) | $40,000 | |||||||||
4 | Slowsand Filters | ($20,000) | $20,000 | |||||||||
5 | Motorcycles and Trucks | ($20,000) | $20,000 | |||||||||
6 | Prepaid Marketing, Brand Ambassador | ($100,000) | $100,000 | |||||||||
Through-the-year activities | ||||||||||||
7 | Revenues | $219,000 | $219,000 | |||||||||
Revenue Underreporting | ($32,850) | ($32,850) | ||||||||||
Cost of Revenue, Vendor Compensation | ($37,230) | ($37,230) | ||||||||||
8 | Technicians' Wages | ($3,600) | ($3,600) | |||||||||
9 | Local Management Salaries | ($120,000) | ($120,000) | |||||||||
10 | Sales Staff Salaries | |||||||||||
11 | Water Testing & Filter Maintenance | ($10,200) | ($10,200) | |||||||||
12 | Marketing Expenses | ($10,000) | ($50,000) | ($60,000) | ||||||||
13 | Vehicle Expenses | ($2,500) | ($2,500) | |||||||||
14 | Other Costs | ($29,784) | ($29,784) | |||||||||
Year-closing activities | ||||||||||||
15 | Depreciation | |||||||||||
Blue Future Contract | ($2,667) | ($2,667) | ||||||||||
Slowsand Filters | ($1,333) | ($1,333) | ||||||||||
Motorcycles and Trucks | ($4,000) | ($4,000) | ||||||||||
YEAR 1 CLOSING TOTALS | $17,836 | $18,667 | $16,000 | $87,333 | $0 | $225,000 | ($85,164) | |||||
ASSETS | = | LIABILITIES & OWNERS' EQUITY | ||||||||||
Cash | Filters | Vehicles | Prepaid Costs | Debt | Paid-in Capital | Retained Earnings | ||||||
YEAR 2 | ||||||||||||
Opening Balances | $17,836 | $18,667 | $16,000 | $87,333 | $0 | $225,000 | ($85,164) | |||||
Beginning-of-year activities | ||||||||||||
1 | Debt | $1,000,000 | $1,000,000 | |||||||||
2 | Slowsand Filters | ($487,500) | $487,500 | |||||||||
3 | Motorcycles and Trucks | ($492,500) | $492,500 | |||||||||
Through-the-year activities | ||||||||||||
7 | Revenues | $8,760,000 | $8,760,000 | |||||||||
Revenue Underreporting | ($1,314,000) | ($1,314,000) | ||||||||||
Cost of Revenue, Vendor Compensation | ($1,489,200) | ($1,489,200) | ||||||||||
8 | Technicians' Wages | ($120,000) | ($120,000) | |||||||||
9 | Local Management Salaries | ($325,000) | ($325,000) | |||||||||
10 | Sales Staff Salaries | ($36,000) | ($36,000) | |||||||||
11 | Water Testing & Filter Maintenance | ($408,000) | ($408,000) | |||||||||
12 | Marketing Expenses | ($25,000) | ($50,000) | ($75,000) | ||||||||
13 | Vehicle Expenses | ($65,000) | ($65,000) | |||||||||
14 | Other Costs | ($1,191,360) | ($1,191,360) | |||||||||
Year-closing activities | ||||||||||||
15 | Depreciation | |||||||||||
Blue Future Contract | ($2,667) | ($2,667) | ||||||||||
Slowsand Filters | ($33,833) | ($33,833) | ||||||||||
Motorcycles and Trucks | ($102,500) | ($102,500) | ||||||||||
16 | Repay Debt | ($1,000,000) | ($1,000,000) | |||||||||
17 | Interest Charge | ($100,000) | ($100,000) | |||||||||
YEAR 2 CLOSING TOTALS | $2,724,276 | $472,334 | $406,000 | $34,666 | $0 | $225,000 | $3,412,276 | |||||
ASSETS | = | LIABILITIES & OWNERS' EQUITY | ||||||||||
Cash | Filters | Vehicles | Prepaid Costs | Debt | Paid-in Capital | Retained Earnings | ||||||
YEAR 3 | ||||||||||||
Opening Balances | $2,724,276 | $472,334 | $406,000 | $34,666 | $0 | $225,000 | $3,412,276 | |||||
Beginning-of-year activities | ||||||||||||
1 | Slowsand Filters | ($250,000) | $250,000 | |||||||||
2 | Motorcycles and Trucks | ($237,500) | $237,500 | |||||||||
Through-the-year activities | ||||||||||||
7 | Revenues | $13,140,000 | ||||||||||
Revenue Underreporting | ($1,971,000) | |||||||||||
Cost of Revenue, Vendor Compensation | ($2,233,800) | |||||||||||
8 | Technicians' Wages | ($180,000) | ||||||||||
9 | Local Management Salaries | ($400,000) | ||||||||||
10 | Sales Staff Salaries | ($18,000) | ||||||||||
11 | Water Testing & Filter Maintenance | ($612,000) | ||||||||||
12 | Marketing Expenses | ($129,352) | ||||||||||
13 | Vehicle Expenses | ($110,000) | ||||||||||
14 | Other Costs | ($2,632,000) | ||||||||||
Year-closing activities | ||||||||||||
15 | Depreciation | |||||||||||
Blue Future Contract | ($2,667) | ($2,667) | ||||||||||
Slowsand Filters | ($50,500) | |||||||||||
Motorcycles and Trucks | ($150,000) | |||||||||||
YEAR 3 CLOSING TOTALS | $7,090,624 | $671,834 | $493,500 | $31,999 | $0 | $225,000 | $3,409,609 |
Related Book For
International Management Managing Across Borders and Cultures Text and Cases
ISBN: 978-0134376042
9th edition
Authors: Helen Deresky
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