CASE BRUCKNER

The Company Bruckner is closing the books for the year 2014, first of its activities.
The company is of a commercial nature, selling products without transformation.
The students are asked to:
1. Prepare the books for 2014 on the journal and ledger books.
2. Close the year 2014 by calculating the profit or the loss for 2014.
3. Prepare the balance sheet as of 31st December 2014
Assume that no items remained in the warehouse as of the end of the year so no
need to adjust the inventories or purchases expenses.
During 2014 the following events happened to the company
1. On 1st January the company was created with a capital of 25.000 euros that were
deposited on a current account.
2. Purchase of merchandise on account for 500 euros (not paid to suppliers)
3. On 1 st january some land is bought for 6.000 euros same as a vehicle for 3.000
both paid against the current account. Please note that the land is not
depreciated.
4.

The company invoices the customers for 7.000 on credit (the customers dont
pay cash).

5. An invoice from the utilities company for 300 euros is paid through the bank
account.
6. The company buys office supplies for 1.500 euros paid cash through the bank.
Please note that office supplies are considered expenses and not assets.
7. The employees are paid cash 1.300 euros as salaries.
8. The company collects the customers of the operation in 4. above.
9. The company pays the suppliers pending from 2. above.
10. The company buys merchandise for 1.600 euros on a credit basis.
11. The company sells on credit to a customer for 2.300 euros
12. The travelling expenses of the general manager of the company are paid for 600
euros.
On the 31st December the company must record the depreciation of the year for the
vehicle. It will depreciate on a linear basis for 3 years. Since it was bought on the 1 st
January it will depreciate for a whole year. The land is not depreciated.
Try to solve the exercise preparing the solution and checking with the final
solution below.

JOURNAL AND LEDGER BOOKS

1

JOURNALS
DR
25.000

Banks

500

Purchases:
merchandise

6.000
3.000

Lands
Vehicles

7.000

Clients

300

Utilities

1.500

Purchases:
Office supplies

1.300

Salaries

7.000

Bank

500

Suppliers

1.600

Purchases:
Merchandise

2.300
600
1.000

CR
Entry 1. 1st January
to
Share Capital
Entry 2
to
Suppliers
Entry 3
to
to
Entry 4
to
Entry 5
to
Entry 6
to
Entry 7
to
Entry 8
to
Entry 9
to
Entry 10
to

25.000
500

Banks
Banks

6.000
3.000

Sales

7.000

Bank

300

Bank

1.500

Bank

1.300

Clients

7.000

Bank

500

Suppliers

1.600

Entry 11
Clients
to
Sales
Entry 12
Travelling expenses
to
Bank
st
Entry 13. 31 December
Depreciation charge
to
Accumulated
depreciation

2.300
600
1.000

LEDGER BOOKS
Capital (L)
DR

CR
Entry 1

25.000

BAL. 25.000
Bank current account (A)
DR
Entry 1
Entry 8

CR
25.000 Entry 3
7.000 Entry 3
Entry 5
Entry 6
Entry 7
Entry 9
Entry 12
BAL.

6.000
3.000
300
1.500
1.300
500
600
18.800

Land (A)
DR
Entry 3

CR
6.000
BAL.

6.000

Vehicles (A)
DR
Entry 3

CR
3.000
BAL.

3.000

Suppliers (L)
DR
Entry 9

CR
500 Entry 2
Entry 10
1.600

BAL.

500
1.600

Purchases (E)
DR
Entry 2
Entry 6
Entry 10

CR
500
1.500
1.600
BAL.

3.600

Clients (A)
DR
Entry 4
Entry 11

CR
7.000 Entry 8
2.300
BAL.

7.000
2.300

Salaries (E)
DR
Entry 7

CR
1.300
BAL.

1.300

Sales (I)
DR

CR
Entry 4
Entry 11

BAL.

7.000
2.300

9.300
Travels (E)
DR

Entry 12

CR
600
BAL.

600

Utilities (E)
DR
Entry 5

CR
300
BAL.

300

Depreciation charge (E)

DR
Entry 13

CR
1.000
BAL.

1.000

Accumulated Depreciation (L)

DR

CR
Entry 13

BAL.

1.000

1.000

Profit and Loss account for 2014

Revenues
Sales

9.300
9.300

Total Revenues
Expenses
Purchases
Salaries
Utilities
Travels
Depreciation charge

3.600
1.300
300
600
1.000
6.800

Total expenses

PROFIT OF THE YEAR

2.500

Balance SHEET (as of 31st december 2014)

ASSETS
CURRENT ASSETS
Bank account
Clients

FIXED ASSETS
Land
Vehicles
Accumulated
depreciation

TOTAL ASSETS

18.800
2.300

LIABILITIES + EQUITY
CURRENT LIABILITIES
Suppliers

1.600

NON CURRENT LIABILITIES

6.000
3.000
-1.000

29.100

EQUITY
Capital
Profit for the year

TOTAL LIABILITIES + EQUITY

25.000
2.500

29.100