Vadero Inc Solution

 

© Corporate Finance Institute

Vadero Inc Solution Vadero Inc engaged in the following transactions: 1. 2. 3. 4. 5.

Issued common shares of 300. Bought equipment for 200. It has an expected life of 10 years. Bought inventory of 100. 100. 80 of of this was paid in cash. cash. The remainder remainder is outstanding outstanding at the balance shee Sold 75% of the inventory for 120. 100 of this had been received in cash at the balance sheet date. Paid cash expense of 15.

Construct the balance sheet of Vadero Inc. Recording Transactions: 1. Cash   Common shares

Dr 300 Cr 300

2. Plant and equipment   Depreciation   Cash

Dr 180 Dr 20

3. Inventory   Cash   Accounts payable

Dr 100

4. Cash   Accounts receivable   Cost of sales   Inventory   Revenue

Dr 100 Dr 20 Dr 75

5. Expenses

Dr 15

 

Cash

Cr 200

Cr 80 Cr 20

Cr 75 Cr 120

Cr 15

Balance Sheet Assets

Liabilities

Current assets:

Current liabilities:

Cash

105

Accounts receivable

20

Inventory

25

Total current assets

Accounts payable Non-current Non-curre nt liabilities:

150 Shareholders' Shareholder s' equity

Non-currentt assets: Non-curren Plant and equipment

180

Total non-current assets

180

Common shares Retained earnings Revenues

 

Cost of sales Depreciation Expenses Total assets

330

Total liabilities and shareholders' eq

 

 

t date.

20

300 120

 

(75) (20) (15) 10 ity

330