A Belgium subsidiary's beginning and ending trial balances appear below: Dr (Cr) January 1 December 31 Cash, receivables € 1,500 € 1,200 Inventories 3,000 3,500 Plant...

3.7 Ratings (476 Votes)

FINANCIAL POSITION AS ON 1 JAN

LIABILITIES ASSETS

LIABILITIES 18500 CASH RECEIVABLES 1500

CAPITAL STOCK 4000 INVENTORY 3000

RETAINED EARNINGS 12000 PLANT EQUIPMENT 30000

34500 34500 PROFIT AND LOSS ACCOUNT FOR THE YEAR

OPENING STOCK+PURCHASES -CLOSING STOCK=COST OF SALE

3000+PURCHASES-3500=9500

PURCHASE=9500+3500-3000=10000

CALCULATION OF PROFIT

SALE -COST OF SALE=15000-9500=GROSS PROFIT=500

PROFIT AND LOSS ACCOUNT

TO OUT OF POCKET EXP. 4000 BY GROSS PROFIT 5500

TO DEPRICIATION 1000

TO NET PROFIT 500

9500 9500

BALANCE SHEET AT THE END OF YEAR

LIABILITIES ASSETS

LIABILITIES 27200 CASH RECEIVABLES 1200

CAPITAL STOCK 4000 INVENTORY 3500

RETAINED EARNING 12000+500 PLANT EQUIPMENT 39000

43700 43700

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	January 1	December 31
Cash, receivables	€ 1,500	€ 1,200
Inventories	3,000	3,500
Plant & equipment, net	30,000	39,000
Liabilities	(18,500)	(27,200)
Capital stock	(4,000)	(4,000)
Retained earnings, beginning	(12,000)	(12,000)
Sales revenue	--	(15,000)
Cost of sales		9,500
Out-of-pocket selling & administrative expenses	--	4,000
Depreciation expense	--	1,000
Total	€ 0	€ 0

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