2017 january

On 1 January 2016, Chicken A/S borrows DKK 4,000,000 from a Danish mortgage bank. The loan has a 6year m
It is an annuity loan with an annual payment of DKK 738,217, which is due and paid on 31 December – the firs
a
0
Cash D 3,131,647
Cash C
Loan D
Loan C 3,325,140
Equity D 193,493
Equity

Borrows (mortage) 4000000

Maturity (years) 6
yearly nominal interest 4%
annual payment 738217
Proceeds 3869864
effective yearly rate 5%
Instalments 544724

On 1 January 2016, Chicken A/S borrows DKK 4,000,000 from a Danish mortgage bank. The loan has a
It is an annuity loan with an annual payment of DKK 738,217, which is due and paid on 31 December – the firs
b
Balance Sheet
Cash D 3,131,647
Cash C
Loan D
Loan C 3,313,336
Equity D 181,689
Equity

borrows 4000000
Maturity 6
nominal interest 4%
annual payment 738217
proceeds 3869864
annual interest 5%
Instalment 556528

The company uses the allowance method to calculate and write-off their uncollectible receivables. The total sa
The company estimates that 6 % of its outstanding total sales on credit will be uncollectible. The actual and alr
c Allowance method

Balance Sheet
 Balance Sheet

allowances for doubtful receivables C 270,000

Equity D 270,000

Total sales 26000000

Payments 22000000
uncollectible 6%
bad debt expense 150000
receivables 3000000

Chicken A/S has spent DKK 1.5 million in cash on development for new packaging machinery, which will be full
d

Balance Sheet
Cash c 1,500,000
Development project d 1,500,000

money spent 1500000

Chicken A/S received dividends totalling DKK 3.0 million in cash from the English company Chicken Plc, a comp
e Equity method

Balance Sheet
Cash d 3,000,000
Investment c 3,000,000
Equity d 3,000,000
Equity c 3,000,000

dividends 3000000
owns 30%
 2017 February
The company has produced 150 units, of which 50 units have been sold in cash for DKK 25 each. Materials wer
Direct wages were paid with DKK 450. Indirect production costs (overhead) were paid in cash with DKK 600. Th
a

Balance Sheet
Inventory (materials+wages+production cost) d 2,100
Invetory( c 700
Cash c 2,100
Cash d 1,250
Equity c 550

produced units 150

sold in cash 25*50 (revenues) 1250
materials purchased 1050
wages 450
indirect production cost 600
production capacity 100
units sold 50
Net cost of raw mate
New Wages in Income
Net Overhead in Inco

The company has produced 75 units, of which 50 units have been sold in cash for DKK 25 each. Materials were
b Direct wages were paid with DKK 225. Indirect production costs (overhead) were paid in cash with D

Balance Sheet
Inventory (materials+wages+production cost) d 1,350
Invetory( c 950
Cash c 1,350
Cash d 1,250
Equity c 300

produced units 75
sold in cash 25*50 (revenues) 1250
materials purchased 525
wages 225
indirect production cost 600
production capacity 100
units sold 50
 The company has entered into a leasing agreement for an automatic printing facility, which could be bought fo
The company uses straight-line depreciation for equipment, and the salvage value is estimated at zero. Based
c Please note that any costs not explicitly mentioned are to be disregarded in your calculations for the second ye

Balance Sheet
Cash c 600,000
tax payable d 132,000
Equity d 468,000

leasing agreement 4000000

expected useful life 600000
interest rate 4.23946%
corp. Taxrate 22%
tax payable 132000

The company has entered into a leasing agreement for an automatic printing facility, which could be bought fo
The company uses straight-line depreciation for equipment, and the salvage value is estimated at zero. Based o
d Please note that any costs not explicitly mentioned are to be disregarded in your calculations for the second ye

Balance Sheet
cash c 600,000
Equipment c 500,000
tax payable d 132,000
Lease liability d 448,669
deffered tax d 11,293
equity d 508038

leasing agreement 4000000

expected useful life 600000
interest rate 4.23946%
corp. Taxrate 22%
tax payable 132000
depreciation 500000
years 8
 At the end of 2016, the company is engaged in a project which runs for 42 months. During 2016, the company
The project is recognised using the percentage-of-completion method, and the project has a fixed sales price o

e
Balance Sheet
Cash c 2,100,000
Receivables d 2,250,000
Equity c 149,967
Deffered tax c 33

project period 42
Cash paid 2100000
expected total cost 8400000
fixed sales price 9000000
Receivables 2250000

2017 august
In 2016, the company purchased new tangible fixed assets. In this connection, the company had freight expens
expenses for repair of factory floor of DKK 20,000, expenses for painting factory floor of DKK 8,000, and subse
The company has received and paid cash invoices in relation to these expenses, in total DKK 143,000. Please as
a
Balance sheet
Cash c 143,000
tangible fixed assets d 90,000
Equity d 53,000
 Freight expenses 10000
assembling expenses 25000
electricity installation expenses 35000
repair of factory floor 20000
painting factory floor 8000
training employees 45000
total expenses 143000

In late 2016, LocalFish A/S received a compensation claim of DKK 1.0 million from an international customer in
The compensation claim is attributable to a number of alleged durability problems associated with the frozen f
On the basis of a technical expert opinion, the management of LocalFish A/S infers that alleged durability prob
b
Balance Sheet
Provision c 1,000,000
Equity d 1,000,000

compensation claim 1000000

LocalFish A/S has subscribed capital of DKK 25.0 million and accumulated reserves of DKK 21.0 million, plus cas
Management has now decided to pay cash dividends of 15% of the share capital.
c
Balance Sheet
Cash c 3,750,000
Equity d 3,750,000

Subscribed capital 25000000

accumulated reserves 21000000
cash equalents 4000000
cash dividends 15%
Cash 3750000
 The company is about to depreciate a fixed asset. The asset was acquired three years ago for DKK 10.0 million
The company uses the sum-of-year digits method for depreciating this type of asset over the useful life.
The scrap value was originally (i.e. after 5 years) assessed to DKK 1.0 million, but now the scrap value is reasse
d
Balance Sheet
Fixed assets c 1,200,000
Equity d 1,200,000

asset 10000000
useful life 5
reassesed useful life 8
depreciation 1000000
reassesed depreciation 400000

The company uses the allowance method to calculate and write-off their uncollectible receivables. The total sa
The company estimates that 6% of its outstanding total sales on credit will be uncollectible. The actual and alre
Please calculate and record the remaining provision (allowance) for doubtful accounts at the end of the year a
e
Balance Sheet
Allowances fo doubtful receivables c 50,000
Equity d 50,000

Total sales credited 96000000

total sales collected 93000000
uncollectible 6%
bad debt 250000
receivables 2000000
 2018 January
The annual impairment test of the production plant shows that the fair value of a machine is DKK 420,000. The

a
Balance Sheet
Acc. Depreciation c 150,000
Equity d 150,000

Machine 420000
Carrrying amount 850000
Value in use 700000
Depreciation 150000

The firm has audited its receivables and realizes that 30% of the customers will only pay back 50% of the amou

b
Balance Sheet
Provision for bbad debt c 24,000
Equity d 24,000

Recivable balance 120000

30% of the customers 50%
5% of the customers 0
customers 30%
customers 5%

LS Components A/S revalues a property to its fair value of DKK 9 million in the end of 2017. The carrying amou
c
Balance Sheet
Building d 2,000,000
deferred tax c 500,000
Equity c 1,500,000

Property 9000000
Carrying amount 7000000
tax 25%

The firm purchased a new production machinery in 2017. In this connection, the company had freight expense
The company has just received invoices in relation to these expenses which total DKK 143,000. Please assist th
d
Balance Sheet
Cash c 143,000
Tangible fixed assets d 98,000
Equity d 45,000

freight expense 10000

installation expense 25000
cutomization of machinery software 35000
floor repair expense 28000
training employees 45000
Total expenses 143000

LS Components A/S has spent DKK 2.5 million in cash on developing a new packaging machinery, which will be
The firm is certain that the new machinery will contribute to considerable, future economic benefits for the co
e
Balance Sheet
Cash c 2,500,000
developing project d 2,500,000
 development 2500000

2018 February
The firm has received a prepayment of DKK 50,000 for consultancy support scheduled to start in early 2018.
a
Balance Sheet
Cash d 50,000
Accurals c 50,000

Prepayment 50000

The firm has entered a capital lease agreement for new office supplies totaling DKK 400,000. The lease agreem
Grow Consulting uses the SYD method to depreciate equipment and estimates the residual value after four ye
b
Balance Sheet
Equipment d 400,000
Lease obligation c 400,000
Lease obligation d 91,661
Acc. Deprec. Equipment c 160,000
Equity d 160,000
Equity d 23,339
Cash c 115000

lease 400000
annual payments 115000
after 4 years 0
internal interest rate 5.8347%
number of years 4
Interest expense 23338.8
 Grow Consulting has invested DKK 70,000 in cash to establish a customer database. The firm hopes that the da
c
Balance Sheet
Cash c 70,000
Equity d 70,000

investment 70000

The firm wishes to expand to Sweden and has increased its share capital by 20,000 shares with a nominal value
d
Balance Sheet
Cash d 1,160,000
Company capital c 800,000
Equity reserves d 360,000

share capital 20000

nominal value 40
selling price 60
Total insurance cost 40000

In late 2017, Grow Consulting is involved in streamlining the processes in a larger Jutlandic municipality. The pr
This corresponds to 30% of the total estimated labor costs. The sales price of the entire project is DKK 600,000
The project is recognized with the production method in Grow Consulting’s financial statements, while the sale
e
Balance Sheet
Cash c 155,000
Equity d 155,000
Equity c 180,000
Equity d 6,250
receivables d 180,000
deffered tax c 6250

project lasts (months) 18

labor cost 155000
 total estimated labor cost 30%
sales price 600000
tax 25%

2018 August
The annual impairment test of the production plant shows that the fair value of a machine is DKK 1,600,000. T
a
Balance Sheet
[Link] c 600,000
Equity d 600,000

Machine value 1600000

Carrying amount 3400000
value in use 2800000

DanFish A/S revalues a property to its fair value of DKK 18 million at the end of 2017. The carrying amount was
b
Balance Sheet
Building d 3,000,000
Deffered tax c 660,000
Equity c 2,340,000

Property 18000000
carrying amount 15000000
tax 22%

The firm purchased a new production machinery in 2017. In this connection, the company had freight expense
 and finally expenses related to courses for the employees in the amount of DKK 30,000. The company has just
c
Balance Sheet
tangible fixed asset d 153,000
accounts payable c 183,000
Equity d 30,000

new machinery
freight expense 25000
installation expense 35000
customization of software 45000
floor repair 48000
training employees 30000
total 183000

In late 2017, DanFish is involved in streamlining the processes at a cooperation partner. The project started in
This corresponds to 30% of the total estimated labour hours, and the project is now halfway completed. The sa
The project is recognised with the production method in DanFish’s financial statements, while the sales metho
d
Balance Sheet
Cash c 225,000
Receivables d 300,000
Equity c 75,000
Deffered tax c 16,500

project lasta (months) 40

labor cost 225000
total estimated labor hours 30%
sales price 1000000
tax 22%
Receivables 300000
 DanFish A/S has spent DKK 4.0 million in cash on research in smoking of freshwater fish, which will be finished,

e
Balance Sheet

Cash c 4,000,000
Equity d 4,000,000

Money spent development 4000000

On January 1st, 2016, Chicken A/S borrows DKK 5,000,000 from a Danish mortgage bank. The loan has a 7-yea
It is an annuity loan with an annual payment of DKK 833,048 which becomes due and is paid on December 31s
The effective yearly rate of interest is accordingly 5.0 per cent. The company uses the straight-line amortizatio
f
Balance Sheet
Cash D
Cash C 833,048
Loan D 632,702
Loan C
Equity D 200,346
Equity

Borrows (mortage) 5000000

Maturity (years) 7
yearly nominal interest 4%
annual payment 833048
Proceeds 4820327 I
effective yearly rate 5% 25,668 + 174,678 =
Instalments 632702

On January 1st, 2016, Chicken A/S borrows DKK 5,000,000 from a Danish mortgage bank. The loan has a 7-yea
On January 1st, 2016, the proceeds were DKK 4,820,327. The effective yearly rate of interest is accordingly 5.0
a
0
Cash D
 Cash C 833,048
Loan D 621,633
Loan C
Equity D 211,415
Equity

Borrows (mortage) 5000000

Maturity (years) 7
yearly nominal interest 4%
annual payment 833048
Proceeds 4820327
effective yearly rate 5%
Instalments 621633

2019 January
The firm is engaged in a project that delivers cleaning service to a municipality. The project started January 1,

a
Balance Sheet
Receivables d 570
Cash c 500
Equity c 570
Equity d 500

project 18
contract value 950
paid in cash 500
total cost 60%

Clean4Real uses some of its excess cash to purchase a corporate bond in a larger European firm on December

b
Balance Sheet
Cash c 98.5
Long-term investment d 98.5
 excess cash
maturity of the bond 5
face value 100
price at its issue 98.5

The firm has produced 200 robot mops, corresponding to the expected normal production. 130 of these have
c
Balance Sheet
Cash d 2,600
Cash c 1,500
Inventory d 2,900
Inventory c 1,885
Wages payable c 440
Acc [Link] assets c 960
equity c 715

produced 200
sold 130
at price 20
raw materials 1500
direct wages (not paid) 440
indirect production cost 960

The firm determines that DKK 400 of its receivables may be impaired. Clean4Real estimates that only 30% of t
d
Balance Sheet
Provision for bad debt c 280
Equity d 280
 receivables 400
pay back 30%

Clean4Real prepaid DKK 144 for a one year membership of trade association on September 1, 2018, which wa
e
Balance Sheet
Prepayment c 48
Equity d 48

Prepaid 144
months 4
48

2019 February
On January 1, 2018, Fresh A/S purchases a piece of free-hold land and a building together, and pays DKK 8 mil
The useful life of the building is 20 years, and it has no residual value. Fresh A/S uses straight-line method to d
a
Balance Sheet
Acc. Depreciation c 100,000
Equity d 100,000
 Cash 8000000
cost of the land 75%
cost of the building 25%
useful life (years) 20
straight line method 100000

On January 1, 2018, Fresh A/S takes a loan from a Danish bank for five years. The proceeds from the loan are D
The first cash payment is made on December 31, 2018. The effective interest rate is 6% p.a. Fresh A/S uses th
b
Balance Sheet
Cash D 50,000
Cash C
Loan D
Loan C 37,363
Equity D 12,637
Equity

Maturity (years) 6
yearly nominal interest 6%
annual payment 50000
Proceeds 210618
Instalments 37363

Fresh A/S owns 30% of Blue A/S, which is recognized using the equity method. The net income of Blue A/S in 2
c
Balance Sheet

Cash d 3,600
Investment c 3,600
Investment d 8,100
Equity c 8,100
Equity c 4,500
free equity reserves d 4,500

receives cash dividend 3600

owns 30%
net income 27000
 8100

On December 31, 2018, a customer of Fresh A/S returns a defective product for replacement. This product wa
Fresh A/S immediately sends a new product worth DKK 3,000 to the customer, because it was expected, whe
d
Balance Sheet
Provision for warranty d 3,000
Inventory c 3,000

warranty (years) 2
new product 3000

Fresh A/S started a project for a customer January 1, 2018, which runs for 36 months. During 2018, Fresh A/S
The fixed sales price of the project is DKK 8 million, which will be received in cash, when the project is comple
e
Balance Sheet
Receivable d 2,400,000
Cash c 2,000,000
Equity c 400,000

project (months) 36
cash 2000000
total expected cost 30%
fixed sales price 8000000

2019 August
In the spring of 2019, HACO A/S received a large order from Vestas Wind Systems A/S on unspecified steel com
 Of the produced items, 100 units were sold in cash at DKK 64 each in June. Raw materials worth DKK 7,680 we
a
Balance Sheet
Cash d 6,400
Cash c 7,680
Inventory d 9,240
Inventory c 5,225
Wages payable c 680
Acc [Link] assets c 880
equity c 1,175

production 160
units sold 100
at price 64
raw materials 7680
wages 680
production cost 880
sold in cash 6400
expected production 200

In the financial year 2017/18, HACO A/S acquired production facilities for DKK 8,800. The company uses linear
The declining balance method is used to depreciate these assets in the tax accounts, and the depreciation rate

b
Balance Sheet
Acc. Depreciation c 1,000
deffered tax c 143
tax payable d 363
equity d 780

production facilities 8800

expected life time 8
scrap value 800
depreciation rate 25%
tax rate 22%
8000

HACO A/S prepaid DKK 24 for a one year membership of a trade association on March 1, 2019, which was book
c
Balance Sheet
Prepayment c 8
 Equity d 8

Monthly costs are 24/12 =

Prepayment 24
recognized in this financia
2.00 that the entire amount w
8 October 1, 2018. In that c
sundry costs and debits p
full points.

At the beginning of 2019, HACO A/S obtained a ten-year mortgage loan of nominally DKK 5,000 at rate 98, with
which is paid for the first time on June 30, 2019. The effective interest rate on the loan is 1.219205% at half-ye
d
Balance Sheet
Cash d 4,890
cash c 277
Loan c 4,890
loan d 217
Equity d 59.62

mortage loan (years) 10

nominally 5000
at rate 98
nominal interest 2%
borrowing costs 10
half yearly cash payment 277 Loan proceeds: 5,000
effective interest rate 1.22% Interest: 4,890
Instalment: 277

During the spring of 2019, HACO A/S started a major project for a customer, with an expected duration of 18 m
The project is recognized according to the percentage of completion method and has a fixed selling price of DK
e
Balance Sheet
 Balance Sheet
Receivable d 4,400
Cash c 3,400
Equity c 1,000

expected duration (months) 18

paid in cash 3400
total budget 17000
fixed selling price 22000

In April 2019, HACO A/S acquired a new truck to use in the warehouse. The company received
the following five invoices regarding the acquisition, which are all settled in cash:
1. Purchase price for truck, DKK 600 incl. 25% VAT
2. Shipping and delivery costs, DKK 10 incl. 25% VAT
3. Employee truck driver course, DKK 6 VAT exempt
4. Insurance for the period April 1 - June 30, 2019, DKK 4 VAT exempt
5. External service inspection, control and lubrication of hydraulic hoses in June 2019, DKK 5
incl. 25% VAT

f
Balance Sheet
equipment d 480
cash c 625
Other liabilities d 125
equity d 14

purchase price 600 480

shipping price 10 8
employee course 6
insurance 4
external service inspection 5
age bank. The loan has a 6year maturity, and the loan has a yearly nominal interest of 4.0 per cent. Interests are compounded annuall
d paid on 31 December – the first time was 31 December 2016. On 1 January 2016, the proceeds were DKK 3,869,864. The effective y
Income Statement
By nature By function
Interest expense debit 193,493 Interest expense debit

Interests: proceeds*effective yearly rate 193493

mortgage bank. The loan has a 6year maturity, and the loan has a yearly nominal interest of 4.0 per cent. Interests are com
d paid on 31 December – the first time was 31 December 2016. On 1 January 2016, the proceeds were DKK 3,869,864. The effective y
Income Statement
By nature By function
Interest debit 181,689 Interest debit

Interest: 181689.33

(borrows-proceeds)/ years of maturity +borrows *nominal interest %

ollectible receivables. The total sales on credit during year 2016 amount to DKK 26 million, and the payments collected during year 20
e uncollectible. The actual and already recorded amount of expected bad debt expense in year 2016 is DKK 150,000, and the receivabl

Income Statement
 By nature By function

Other external expense debit 270,000 Administrative expense debit

Accounts receivable 7000000

Allowance ending 420000
Regulation: 270000

ging machinery, which will be fully developed, marketed and introduced on the market within the next few years. Chicken A/S is certa

Income Statement
By nature By function
No effect No effect

lish company Chicken Plc, a company of which Chicken A/S owns 30 per cent. Chicken A/S uses the equity method for recognising cap

Income Statement
By nature By function
No effect No effect
h for DKK 25 each. Materials were purchased in cash for DKK 1,050.
ere paid in cash with DKK 600. The company has a normal production capacity of 100 units. Please state and record all the book entrie

Income Statement
By nature By function
Revenues c 1,250 revenues c
cost of raw materials d 350 costs ofgoods sold d
Wages d 450
cost d 600
change in stocks and work in progress c 700

Net cost of raw materials in Income Statement is 350

New Wages in Income Statement is 150

Net Overhead in Income Statement is 200

Net cost of raw materials in Income Statement is: 1,050/150 x 50 = 350;
New Wages in Income Statement is 450/150 x 50 = 150;
Net Overhead in Income Statement is: 600/150 x 50 = 200

for DKK 25 each. Materials were purchased in cash for DKK 525.
verhead) were paid in cash with DKK 600. The company has a normal production capacity of 100 units. Please state and record all the
Income Statement
By nature By function
Revenues c 1,250 revenues c
cost of raw materials d 350 costs ofgoods sold d
Wages d 225
cost d 600
change in stocks and work in progress c 225

Net cost of raw materials in Income Statement is 350

New Wages in Income Statement is 150

Net Overhead in Income Statement is 450 300+150

Revenues: 50 units x 25 = 1,250;
Net cost of raw materials in Income Statement is: 525/75 x 50 = 350;
New Wages in Income Statement is 225/75 x 50 = 150;
Net Overhead in Income Statement is: 600/100 x 50 + (600/75 – 600/100) x 75 = 300 + 150 = 450
facility, which could be bought for DKK 4,000,000. The leasing agreement requires payment at the end of each of the next 8 years, wh
value is estimated at zero. Based on this information, the implicit (or effective) yearly interest rate in the leasing agreement can be ca
our calculations for the second year of the leasing agreement. In the tax accounts, the leasing payment is a deductible cost. Assume th
Income Statement
By nature By function
external expense d 600,000 costs of goods sold,
corp. Tax c 132,000 administration expense d
Corp tax c

facility, which could be bought for DKK 4,000,000. The leasing agreement requires payment at the end of each of the next 8 years, wh
alue is estimated at zero. Based on this information, the implicit (or effective) yearly interest rate in the leasing agreement can be cal
our calculations for the second year of the leasing agreement. In the tax accounts, the leasing payment is a deductible cost. Assume th
Income Statement
By nature By function
Depreciation d 500,000 Depreciation d
interest expense d 151,331 Interest expense d
[Link] c 143292.8 Corp tax c

Interest 151331 Cash Assets

Repayment 448669 4000000
Corp. Tax costs: 143292.79 600000
Changed deffered tax 11292.787 500000

Useful calculations:
Interest:[4,000 – (600 – 4,000 x 4.23946%)] x 4.23946% = 151.3
Repayment: 600.0 – 151.3 = 448.7
 Repayment: 600.0 – 151.3 = 448.7
Corp. tax costs: (500.0 + 151.3 x 22% = 143.3
Change deferred tax: 143.3 – 600.0 x 22% = 11.3

onths. During 2016, the company paid DKK 2.1 million, which corresponds to 25 percent of the expected total cost.
e project has a fixed sales price of DKK 9.0 million. Please show how statements for 2016 are affected. Tax should be disregarded.

Income Statement
By nature By function
Revenues c 2,250,000 Revenues c
Cost of sale d 2,100,000 Cost of sale d
Corp. Tax d 33 Corp. Tax d

Total cost 8400000

600000

, the company had freight expenses of DKK 10,000, assembling expenses of DKK 25,000, electricity installation expenses of DKK 35,00
ory floor of DKK 8,000, and subsequently expenses in connection with courses for the employees at an amount of DKK 45,000.
es, in total DKK 143,000. Please assist the company in recognising the expenses correctly.
Income Statement
By nature By function
other expense d 53,000 Costs og goods sold d
 It can be discussed whether painting of floor is a part of the acquisition costs, since this not directly increases the value in

rom an international customer in connection with a large shipment of frozen fish.

lems associated with the frozen fish.
infers that alleged durability problems may not be caused by neither the customer’s nor the shipping agent’s handling of the frozen fis
Income Statement
By nature By function
other expense d 1,000,000 Costs og goods sold d

erves of DKK 21.0 million, plus cash and cash equivalents of DKK 4.0 million.

Income Statement
By nature By function
NO EFFECT NO EFFECT

25 M x 15% = 3.75 M
ee years ago for DKK 10.0 million and has been depreciated during the last 2 years. The original useful life was 5 years. However, when
f asset over the useful life.
but now the scrap value is reassessed to be DKK 0.4 million after the reassessed useful life (i.e. after the 8 years). Please record this ye
Income Statement
By nature By function
Depreciation d 1,200,000 Costs of goods sold d

Book value 4600000

this years depreciation 1200000

Book value beginning year 3 is: 10 – (10-1) x [(5 + 4) / (1 + 2 + 3 + 4 + 5)] = 4.6;

This year’s depreciation: (4.6 – 0.4) x [6 / (1 + 2 + 3 + 4 + 5 + 6)] = 1.2

ollectible receivables. The total sales on credit during year 2016 amount to DKK 96.0 million, and the payments collected during year 2
uncollectible. The actual and already recorded amount of expected bad debt expense in year 2016 is DKK 250,000, and the receivable
accounts at the end of the year and the remaining bad debt expense for the period.
Income Statement
By nature By function
Other external expenses d 50,000 Administrative expenses d

Accounts receivable 5000000

Allowance ending 300000
Regulation 50000

Accounts receivable: 2 + 96 – 93 = 5 M;
Allowance ending: 6.0% x 5 M = 300,000;
Regulation: 300,000 – 250,000 = 50,000
of a machine is DKK 420,000. The carrying amount is DKK 850,000 and the firm estimates the value-inuse at DKK 700,000.

Income Statement
By nature By function
Depreciation equipment D 150,000 COGS D

ll only pay back 50% of the amount and 5% of the customers will not pay anything back. The receivable balance is DKK 120,000 and ha

Income Statement
By nature By function
Other external expense D 24,000 COGS D

Provision for bad debt 24000

120,000*30%*50%+5%*120,000 = 24,000

e end of 2017. The carrying amount was DKK 7 million. Please show the effects of the revaluation after tax. The tax rate is 25%. d
 Income Statement
By nature By function
NO EFFECT NO EFFECT

he company had freight expenses of DKK 10,000, installation expenses of DKK 25,000, customization of the machinery’s software of D
otal DKK 143,000. Please assist the company in recognizing these expenses correctly.
Income Statement
By nature By function
Other expense d 45,000 Costs of goods sold d

ckaging machinery, which will be fully developed, marketed and introduced within the next few years.
ure economic benefits for the company.
Income Statement
By nature By function
No effect No effect
heduled to start in early 2018.
Income Statement
By nature By function
No effect No effect

g DKK 400,000. The lease agreement specifies four annual payments of DKK 115,000 each, corresponding to the expected lifetime of t
es the residual value after four years to be DKK 0. The internal interest rate for this contract is 5.8347%.
Income Statement
By nature By function
Depreciation expense d 160,000 Administrative expense d
Interest expense d 23,339 Interest expense d

Depreciation 160000

Lease obligation: 115,000 – 23,338.8 = 91,661.2

abase. The firm hopes that the database can boost sales to existing customers in the long run.
Income Statement
By nature By function
Advertisin d 70,000 Advertising d

0,000 shares with a nominal value of DKK 40. The selling price at issuance was DKK 60 per share and total issuance costs were DKK 40,
Income Statement
By nature By function
No effect No effect

Cash: 20,000 · 60 – 40,000 = 1,160,000

Company capital: 20,000 · 40 = 800,000
Equity reserve: 1,160,000 – 800,000 = 360,000

ger Jutlandic municipality. The project lasts 18 months, and in 2017 labor costs totaling DKK 155,000 have been paid in cash
the entire project is DKK 600,000 which is due at completion.
nancial statements, while the sales method (complete contract method) is used in the tax statements. The tax rate is 25%
Income Statement
By nature By function
Wages d 155,000 COGS d
Revenue c 180,000 revenue c
Corp. Tax d 6250 Corp. Tax d

Revenue 180000
Corp. Tax 6250
 difference 25000

Revenue: 600,000 · 0.30 = 180,000

Differences in expense and revenue (you always deduct revenues from expense):
180,000 – 155,000 = 25,000
Corp. tax: 25,000 · 0.25 = 6,250

of a machine is DKK 1,600,000. The carrying amount is DKK 3,400,000 and the firm estimates the value-in-use at DKK 2,800,000.
Income Statement
By nature By function
Depreciation Equipment d 600,000 Cost of goods sold d

Depreciation 3,400,000 – 2,800,000 = 600,000 600000

Cost

of 2017. The carrying amount was DKK 15 million. Please show the effects of the revaluation after tax. The tax rate is 22 per cent.
Income Statement
By nature By function
No effect No effect

Deffered tax 660000

he company had freight expenses of DKK 25,000, installation expenses of DKK 35,000, customization of the machinery’s software of D
KK 30,000. The company has just received invoices in relation to these expenses which total DKK 183,000. Please show the effect from
Income Statement
By nature By function
Other external expense d 30,000 administration expense d

n partner. The project started in 2016 and lasts 40 months. In 2017, labour costs totalling DKK 225,000 were paid in cash.
is now halfway completed. The sales price of the entire project is DKK 1,000,000, which is due at completion.
tatements, while the sales method (complete contract method) is used in the tax statements. Please calculate and show the effects in
Income Statement
By nature By function
Revenues c 300,000 Revenues c
Cost of sales d 225,000 Cost of sales d
Corp tax d 16500 Corp tax d

Total costs: 750000

the project contributes positively 250000
Deffered tax Differences in expense and revenue: 300,000 – 225,000 = 75,0
Differences 75000 75,000 · 0.22 = 16,500
Deffered tax 16500
water fish, which will be finished, marketed and introduced within the next few years. The firm is certain that the new machinery will

Income Statement
By nature By function
Research and development
Research expense d 4,000,000 expense d

tgage bank. The loan has a 7-year maturity, and the loan has a yearly nominal interest of 4.0 per cent. Interests are compounded annu
due and is paid on December 31st – the first time was December 31st, 2016. On January 1st, 2016, the proceeds were DKK 4,820,327.
uses the straight-line amortization method for recognising the loan in accordance with the instructions of the textbook (HHTS’s). Pleas
Income Statement
By nature By function
Interest debit 200,346 Interest debit

Interest: 200345.65

Straight line amortization

Interests: [(5,000,000 - 4,820,327)/7 + [5,000,000 – (833,048 - 5,000,000 x 4.0 %)] x 4.0 %] =

25,668 + 174,678 = 200,346;
Payment 833,048; Instalment = 833,048 – 200,346 = 632,702

tgage bank. The loan has a 7-year maturity, and the loan has a yearly nominal interest of 4.0 per cent. Interests are compounded annu
rate of interest is accordingly 5.0 per cent. The company uses the effective interest method for recognising the loan. Please calculate
Income Statement
By nature By function
Interest expense debit 211,415 Interest expense debit
 Interest 211414.77

y. The project started January 1, 2018. The project runs for 18 months, and the total contract value is DKK 950, which will be paid, wh

Income Statement
By nature By function
Revenue c 570 Revenue c
Cost of raw materials d 500 COGS d

ger European firm on December 31, 2018. The maturity of the bond is five years, the face value is DKK 100, and the price at issue wa

Income Statement
By nature By function
No effect No effect
al production. 130 of these have been sold at a price of DKK 20 per unit. Raw materials worth DKK 1,500 were purchased in cash and
Income Statement
By nature By function
revenue c 2,600 Revenue c
cost of raw materials d 1,500 COGS d
staff costs d 440
depreciation expense d 960
work in progress c 1015

Revenue 2600
Net cost of raw materials (income statement): 975 525
Net cost of wages (income statement 286 154
Net overhead costs (income statement 624 336

Revenue: 130 units × 20 = 2,600.

Net cost of raw materials (income statement): 1,500/200 × 130 =975.
Net cost of wages (income statement): 440/200 × 130= 286.
Net overhead costs (income statement): 960/200 × 130 = 624.

Real estimates that only 30% of this group will be able to pay back the outstanding amount.
Income Statement
By nature By function
Bad debt expense d 280 COGS d
 280

on September 1, 2018, which was booked as a prepayment. Please show the adjustment to this account on December 31, 2018.
Income Statement
By nature By function
Soundry costs d 48 Administrative costs d

Monthly costs are 144/12=12 and four months are recognized in t

his financial year. Some students may assume that the entire amo
unt was expensed on sundry September 1, 2018. In that case, the
adjustment credits sundry 96 and debits prepayments 96. This sh
ould give full points

ng together, and pays DKK 8 million in cash. 75% of the payment is booked as the cost of the land, and the remaining 25% is booked
A/S uses straight-line method to depreciate fixed assets. Please make journal entries for the depreciation in 2018.
Income Statement
By nature By function
Depreciation expense d 100,000 Depreciation expense d
The proceeds from the loan are DKK 210,618. The loan contract requires Fresh A/S to make an annual cash payment of DKK 50,000 t
t rate is 6% p.a. Fresh A/S uses the effective interest rate method for the loan. Please make journal entries for the first cash repaymen
Income Statement
By nature By function
Interest expense debit 12,637 Interest expense debit

Interests: proceeds*effective yearly rate 12637

. The net income of Blue A/S in 2018 is DKK 27,000. On December 31, 2018, Fresh A/S receives a cash dividend of DKK 3,600 from Blu
Income Statement
By nature By function
income from investment in income from investment in
associateblue c 8,100 associateblue c
or replacement. This product was sold to the customer on June 15, 2018 with a two-year warranty.
er, because it was expected, when the revenue was recognized that some of the sold products would not last the warranty period.
Income Statement
By nature By function
No effect No effect

months. During 2018, Fresh A/S pays DKK 2 million in cash for this project, which corresponds to 30% of the total expected cost of th
ash, when the project is completed. Fresh A/S uses the percentage-of-completion method to recognize this project.
Income Statement
By nature By function
Cost of sales d 2,000,000 Cost of sales d
revenue c 2,400,000 revenue c

Revenue 2400000

ems A/S on unspecified steel components. In May and June, HACO A/S finished the production of 160 units, but expected production
w materials worth DKK 7,680 were purchased in cash and used in the production, along with direct wages (not yet paid out) worth DK
Income Statement
By nature By function
revenue c 6,400 Revenue c
cost of raw materials d 7,680 COGS d
staff costs d 680
depreciation expense d 880
work in progress c 3465

Revenue 6400
Net cost of raw materials (income statement): 4800 2880
Net cost of wages (income statement 425 255
Net overhead costs (income statement 550 330

8,800. The company uses linear depreciation in the financial statements with an expected lifetime of eight years, and the scrap value
counts, and the depreciation rate is 25%. Please show the effects after tax for the financial year 2018/19 using a tax rate of 22% (year

Income Statement
By nature By function
Depreciation expense d 1,000 Production costs d
Corporate tax c 220 Corporate tax c

Tax payable 363

deffered tax 143
depreciation 1000
corporate tax 220

n March 1, 2019, which was booked as a prepayment. Please show the adjustment to this account at the end of the financial year.
Income Statement
By nature By function
Sundry costs d 8 Administrative costs d
 Monthly costs are 24/12 = 2 and four months are
recognized in this financial year. Some students may assume
that the entire amount was expensed on sundry cost at
October 1, 2018. In that case, the adjustment credits 16
sundry costs and debits prepayments 16. This should give
full points.

minally DKK 5,000 at rate 98, with a nominal interest rate of 2% per year. Borrowing costs amounted to DKK 10. The loan is an annuity
n the loan is 1.219205% at half-yearly interest accrual. Show the effect of the loan in the first half of 2019 with the effective interest r
Income Statement
By nature By function
Interest expense d 59.62 Interest expense d

Loan Proceeds 4890

Interest 59.62
Instalment 217.38

Loan proceeds: 5,000 × 98 / 100 - 10 = 4,890.

Interest: 4,890 × 1.219205% = 59.62.
Instalment: 277-59.62 = 217.38

with an expected duration of 18 months. In the period from January 1 to June 30, 2019, DKK 3,400 was paid in cash of the total budget
and has a fixed selling price of DKK 22,000, which is paid at the end of the project.
Income Statement
 By nature By function
Revenue c 4,400 Revenue c
cost of sales d 3,400 Production costs d

Revenue 4400

Revenue: 22,000×3,400/17,000 = 4,400

ompany received

ne 2019, DKK 5

Income Statement
By nature By function
other external costs d 8 Production costs d
staff costs d 6
ests are compounded annually on 31 December
KK 3,869,864. The effective yearly rate of interest is accordingly 5.0 per cent. The company uses the effective interest method for reco

Cash flow statement

ion
193,493
Cash from operating activities -193493

Cash from financing activities -738217

per cent. Interests are compounded annually on 31 December.

KK 3,869,864. The effective yearly rate of interest is accordingly 5.0 per cent. The company uses the straightline amortization method

Cash flow statement

ion
181,689
Cash from operating activities -181689

Cash from financing activities -738217

181689.3

ents collected during year 2016 amount to DKK 22 million.

K 150,000, and the receivables at the beginning of the year were DKK 3 million. Please calculate and record the remaining provision (a

Cash flow statement

 Cash flow statement
ion

NO EFFECT
270,000

w years. Chicken A/S is certain that the new machinery will contribute to considerable, future economic benefits for the company.

Cash flow statement

ion
Cash from investing activities -1500000

y method for recognising capital interests.

Cash flow statement

ion
Cash from investing activities 3000000
and record all the book entries this causes.

Cash flow statement

ion
1,250 Cash from operating activities -850
700

ease state and record all the book entries this causes.

Cash flow statement

ion
1,250 Cash from operating activities -100
950
 each of the next 8 years, which happens to be the same time as the expected useful life of the equipment, of DKK 600,000.
leasing agreement can be calculated at 4.23946 percent.
a deductible cost. Assume the leasing agreement is to be treated as an operating lease and record the effects. Please show how state

Cash flow statement

ion

600,000 Cash from operating activities -600000

132000

each of the next 8 years, which happens to be the same time as the expected useful life of the equipment, of DKK 600,000.
easing agreement can be calculated at 4.23946 percent.
a deductible cost. Assume the leasing agreement is to be treated as a financial lease and record the effects. Please show how statem

Cash flow statement

ion
500,000 Cash from operating activities -151331
151,331
143292.8 Cash from financing activities -600000

Liabil. Inc. Statm

ax should be disregarded.

Cash flow statement

ion
2,250,000
2,100,000 Cash from operating activities -2100000
33

ation expenses of DKK 35,000

mount of DKK 45,000.

Cash flow statement

ion
53,000 Cash from operating activities -53000

Cash from investing activities -90000

directly increases the value in use.

nt’s handling of the frozen fish.

Cash flow statement

ion
1,000,000
NO EFFECT

Cash flow statement

ion
Cash from financing activities -3750000
 was 5 years. However, when preparing the financial statement for 2016, the useful life is now reassessed to be 8 years.

8 years). Please record this year’s depreciation.

Cash flow statement

ion
1,200,000
NO EFFECT

ments collected during year 2016 amount to DKK 93.0 million

K 250,000, and the receivables at the beginning of the year were DKK 2.0 million.

Cash flow statement

ion
50,000 No effect
 at DKK 700,000.

Cash flow statement

ion
150,000 No effect

balance is DKK 120,000 and has not been written off previously. Disregard VAT.

Cash flow statement

ion
24,000 No effect

x. The tax rate is 25%. d

 Cash flow statement
ion
No effect

he machinery’s software of DK 35,000, expenses to repair the floor of DKK 28,000, and finally expenses related to courses for the emp

Cash flow statement

ion
45,000 Cash from operating activities -45000

Cash from investing activities -98,000

Cash flow statement

ion
Cash from investing activities -2500000
 Cash flow statement
ion
Operating activities 50000

g to the expected lifetime of the supplies.

Cash flow statement

ion
160,000 Operating activities -115000
23,339
Financing activities -91,661
 Cash flow statement
ion
70,000 Operating activities -70000

issuance costs were DKK 40,000.

Cash flow statement

ion
Financing activities 1,160,000

e been paid in cash

e tax rate is 25%

Cash flow statement

ion
155,000 operating activities -155000
180,000
6250
n-use at DKK 2,800,000.

Cash flow statement

ion
600 No effect

e tax rate is 22 per cent.

Cash flow statement

ion
No effect

he machinery’s software of DK 45,000, expenses to repair the floor of DKK 48,000,

. Please show the effect from these invoices.

Cash flow statement

ion
30,000 No effect

ere paid in cash.

culate and show the effects in 2017 – i.e. in the project’s second year – after tax. The tax rate is 22 per cent.

Cash flow statement

ion
300,000 Cash from operating activities -225000
225,000
16500

: 300,000 – 225,000 = 75,000

that the new machinery will contribute to considerable, future economic benefits for the company.

Cash flow statement

ion
Cash from operating activities -4000000
4,000,000

erests are compounded annually on December 31st.

oceeds were DKK 4,820,327.
f the textbook (HHTS’s). Please calculate and show the effects in 2017 – i.e. in the second year of the loan’s maturity

Cash flow statement

ion
200,346
Cash from operating activities -200346

Cash from financing activities -833048

erests are compounded annually on December 31st. It is an annuity loan with an annual payment of DKK 833,048 which becomes due
ing the loan. Please calculate and show the effects in 2017 – i.e. in the second year of the loan’s maturity.

Cash flow statement

ion
211,415
 Cash from operating activities -211415

Cash from financing activities -833048

K 950, which will be paid, when the project is finished. Clean4Real paid DKK 500 in cash for supplies during 2018, corresponding to 6

Cash flow statement

ion
570 Cash from operating activities -500
500

00, and the price at issue was 98.5. Clean4Real plans to keep the bond until maturity.

Cash flow statement

ion
Cash from operating activities -98.5
were purchased in cash and used in the production, along with direct wages (not yet paid out) worth DKK 440. Indirect production co

Cash flow statement

ion
2,600 Cash from operating activities 1100
1,885

Cash flow statement

ion
280 No effect
on December 31, 2018.

Cash flow statement

ion
48 No effect

he remaining 25% is booked as the cost of the building.

Cash flow statement

ion
100,000 No effect
sh payment of DKK 50,000 to the bank (i.e., an annuity loan) at the end of each year
es for the first cash repayment.

Cash flow statement

ion
12,637
Cash from operating activities -12637

Cash from financing activities -50000

vidend of DKK 3,600 from Blue.

Cash flow statement

ion
Cash from investmentactivities 3600
8,100
t last the warranty period.

Cash flow statement

ion
No effect

the total expected cost of the project.

this project.

Cash flow statement

ion
2,000,000 Cash from operating activities -2000000
2,400,000

its, but expected production for this period was 200 units.
s (not yet paid out) worth DKK 680. Indirect production costs from depreciation of production equipment totaled DKK 880.

Cash flow statement

ion
6,400 Cash from operating activities -1280
5,775

Revenue: 100 units × 64 = 6,400.

Net cost of raw materials (income statement): 7,680/160 × 100 =4,800.
Net cost of wages (income statement): 680/160 × 100 = 425.
Net overhead costs (inventory): 880/200 × 60 = 264.
7,680 – 4,800 = 2,880
680 – 425 = 255
880 – 264 = 616

ht years, and the scrap value is estimated to DKK 800.

using a tax rate of 22% (year 2 after the purchase).

Cash flow statement

ion
1,000 No effect
220

end of the financial year.

Cash flow statement

ion
8 No effect
DKK 10. The loan is an annuity loan with fixed half-yearly cash payments of DKK 277
9 with the effective interest rate method.

Cash flow statement

ion
59.62 Cashflow from operating activities -59.62

Cashflow from financing activities 4672.62

aid in cash of the total budgeted costs of DKK 17,000.

Cash flow statement

 Cash flow statement
ion
4,400 Cash flow from operating activities -3400
3,400

Cash flow statement

ion
14 Cash flow from operating activities

Cash flow from investing activities

straightline amortization method for recognising the loan in accordance with the textbook’s (HHTS’s) instructions.

record the remaining provision (allowance) for doubtful accounts at the end of the year and the remaining bad debt expense for the p
during 2018, corresponding to 60% of the total costs. The firm uses the percentage of completion method to recognize the revenue f