Seminar 1

Financial Statements – Balance sheet

Practice exercises
Exercise 1

Matching Financial Statement Items to Financial Statement Categories

Mark each item in the following list as an asset (A), liability (L), or stockholders’ equity (SE)
item that would appear on the balance sheet.

Asset Liability Stockholders’

equity
Short-term bank loan
Accounts receivables
Technical equipment
Goods
Trade receivables
Construction in progress
Intangible assets
Retained earnings
Cash at bank
Investment and development credits
Contributed capital

Solution of exercise 1

Asset Liability Stockholders’

equity
Short-term bank loan X
Accounts receivables X
Technical equipment X
Goods X
Trade receivables X
Construction in progress X
Intangible assets X
Retained earnings X
Cash at bank X
Investment and development credits X
Contributed capital X

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Exercise 2

Mark each item of a manufacturer company in the following list as they would appear on the
balance sheet.

Non- Stockhold Liability

Current
Denomination current ers’ equity
assets
assets
Cash at bank
Buildings owned by the company
Net wages payables to employees
Securities purchased for trading purposes
Loan to employee (maturity 6 months)
Office equipment
Local business tax due in the current year
Securities purchased for investment purposes
Consumer loan borrowed with a maturity of 10
months
Products purchased for resale
Tax and social contribution liabilities
Capital reserve
Development loan borrowed for 10 years
Retained earnings
Capital provided to the company by founders
Inventory management software program

Solution of exercise 2

Non- Stockhold Liability

Current
Denomination current ers’ equity
assets
assets
Cash at bank X
Buildings owned by the company X
Net wages payables to employees X
Securities purchased for trading purposes X
Loan to employee (maturity 6 months) X
Office equipment X
Local business tax due in the current year X
Securities purchased for investment purposes X
Consumer loan borrowed with a maturity of 10
X
months
Products purchased for resale X
Tax and social contribution liabilities X
Capital reserve X
Development loan borrowed for 10 years X
Retained earnings X
Capital provided to the company by founders X
Inventory management software program X

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Exercise 3

Mark each item of a manufacturer company in the following list as they would appear on the
balance sheet.
Non-current assets Current assets

investments

Inventories

receivables
Intangible

Securities
Financial

Accounts
Tangible

Liquid
Denomination

assets

assets

assets
Government bonds with the maturity of 5
years
Office buildings owned by the company
Currency in the cash register
10-month fixed-term bank deposit
Securities purchased for investment
purposes
Uncollected consideration for services
provided to a partner
Securities purchased for trading purposes
Inventory management software program
Goods purchased for resale
Office equipments

Solution of exercise 3

Non-current assets Current assets

investments

Inventories

receivables
Intangible

Securities
Financial

Accounts
Tangible

Liquid
Denomination
assets

assets

assets

Government bonds with the maturity of 5

years X
Office buildings owned by the company X
Currency in the cash register X
10-month fixed-term bank deposit X
Securities purchased for investment
purposes
X
Uncollected consideration for services
X
provided to a partner
Securities purchased for trading purposes X
Inventory management software program X
Goods purchased for resale X
Office equipment X

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Exercise 4

Using each item of the company in the following list prepare the balance sheet for December
31. in the current year.

Denomination Amount (in th HUF)

Cash at bank 10,800
Unpaid value of goods purchased 2,640
Truck for the company’s own use 8,630
Capital provided to the company by the founders 33,000
Loan borrowed for 9 months 2,795
Warehouse and office buildings 31,450
Uncollected consideration for goods sold to a partner 3,100
Securities purchased for investment purposes 845
Provisions 1,200
Accumulated loss from years prior to the current year -950
Capital reserve/Additional paid-in capital 5,000
Profit after tax for the current year 1,420
Tax and contribution liabilities 780
Development and investment loan borrowed for 10 years 8,500
Net wages payable 1,750
Raw materials 460
Cash at cash register 850

Balance sheet, 202X. December 31. (Th HUF)

A. Non-current assets D. Stockholders’ equity
I. Intangible assets I. Contributed capital
II. Tangible assets III. Additional paid-in capital

III. Financial investments IV. Retained earnings

B. Current assets VII. Profit after tax for the year
I. Inventories E. Provisions
II. Accounts receivables F. Liabilities
III. Securities II. Long term liabilities
IV. Liquid assets III. Current liabilities

C. Prepaid expenses and G. Accrued expenses and deferred

accrued income income
TOTAL ASSETS TOTAL EQUITY AND
LIABILITY

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Solution of exercise 4

Balance sheet, 202X. December 31. (Th HUF)

A. Non-current assets 40,925 D. Stockholders’ equity 38,470
I. Intangible assets 0 I. Contributed capital 33,000
II. Tangible assets 40,080 III. Additional paid-in capital 5,000
8,630+31,450
III. Financial investments 845 IV. Retained earnings -950
B. Current assets 15,210 VII. Profit after tax for the year 1,420
I. Inventories 460 E. Provisions 1,200
II. Accounts receivables 3,100 F. Liabilities 16,465
III. Securities 0 II. Long term liabilities 8,500
IV. Liquid assets 11,650 III. Current liabilities 7,965
10,800+850 2,640+2,795+780+1,750
C. Prepaid expenses and 0 G. Accrued expenses and deferred 0
accrued income income
TOTAL ASSETS 56,135 TOTAL EQUITY AND 56,135
LIABILITY

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 Exercise 5

Complete the missing lines of the balance sheet!

data in th HUF
Balance sheet, 31. December 20XX.
A. Fixed assets .......... D. Equity 70,000
I. Intangible assets 8,800 I. Contributed capital 55,000
II. Tangible assets 33,990 IV. Retained earnings 12,880
III. Financial investments 22,000 VII. Profit or loss for the year ………
B. Current assets .......... E. Provisions 800
I. Inventories 16,400 F. Liabilities ..........
II. Accounts Receivable 30,090 I. Subordinated liabilities 0
III. Securities 2,300 II. Long-term liabilities 29,450
IV. Liquid assets …….. III. Current liabilities 19,230
C. Prepaid expenses and accrued income 100 G. Accrued expenses and deferred income 190
TOTAL ASSETS 119,670 TOTAL EQUITY AND LIABILITIES ..........

Solution of exercise 5

data in th HUF
Balance sheet, 31. December 20XX.
A. Fixed assets 64,790 D. Equity 70,000
I. Intangible assets 8,800 I. Contributed capital 55,000
II. Tangible assets 33,990 IV. Retained earnings 12,880
III. Financial investments 22,000 VII. Profit or loss for the year 2,120
B. Current assets 54,780 E. Provisions 800
I. Inventories 16,400 F. Liabilities 48,680
II. Accounts Receivable 30,090 I. Subordinated liabilities 0
III. Securities 2,300 II. Long-term liabilities 29,450
IV. Liquid assets 5,990 III. Current liabilities 19,230
C. Prepaid expenses and accrued income 100 G. Accrued expenses and deferred income 190
TOTAL ASSETS 119,670 TOTAL EQUITY AND LIABILITIES 119,670

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 Exercise 6

Among the items of “Cutie” Confectionery and Trading Ltd. we know the following:

Task:
Specify the position of each item in the balance sheet by balance sheet main-groups and balance
sheet groups and balance sheet items!

Assets and liabilities Balance sheet Balance sheet Balance

main-group group sheet item

Cash register
Currency in the cash register available on hand
Flour, sugar, yeast etc.
Industrial ovens and machines
Net wages payables
The amount of monetary and non-monetary
contributions made by members (investors) of the
company according to the founding document and
registered by the Registry Court
The amount of money in the current account held at
CIB Bank
The final amount invoiced, but not yet financially
settled purchase price of the purchased raw materials
by the company
Packaging materials, decorations
Merchandise credit taken out for 6 months
Cakes for sale (made by the company)
Advance payment for the purchase of new technical
equipment
Computer for administration purposes
Accounting and invoicing software program
The final amount invoiced, but not as yet financially
settled selling price of the sold cakes and baked
products to the customers
The accumulated total profit after tax of all the years
preceding the current year
The amount of credit (loan) for a 5-year maturity
Purchased marzipan for resale

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 Solution of exercise 6

Balance sheet Balance sheet

Assets and liabilities maingroup group Balance sheet item

Other fixtures and

A. Fixed II. Tangible
Cash register fittings, tools and
assets assets
equipment, vehicles
B. Current IV. Liquid
Currency in the cash register available on hand Cash
assets assets
B. Current
Flour, sugar, yeast etc. I. Inventories Raw materials
assets
A. Fixed II. Tangible Technical equipment,
Industrial ovens and machines
assets assets machinery, vehicles
III. Current Other short-term
Net wages payables F. Liabilities
liabilities liabilities
The amount of monetary and non-monetary contributions made by D.
I. Contributed
members (investors) of the company according to the founding Stockholder’s -
capital
document and registered by the Registry Court Equity
B. Current IV. Liquid
The amount of money in the current account held at CIB Bank Cash at bank
assets assets
The final amount invoiced, but not yet financially settled purchase III. Current
F. Liabilities Trade payables
price of the purchased raw materials by the company liabilities
B. Current
Packaging materials, decorations I. Inventories Raw materials
assets
III. Current
Merchandise credit taken out for 6 months F. Liabilities Short-term credits
liabilities
B. Current
Cakes for sale (made by the company) I. Inventories Finished products
assets
A. Fixed II. Tangible Advances given for
Advance payment for the purchase of new technical equipment
assets assets construction
Other fixtures and
A. Fixed II. Tangible
Computer for administration purposes fittings, tools and
assets assets
equipment, vehicles
A. Fixed I. Intangible Concessions, licenses
Accounting and invoicing software program
assets assets and similar rights
The final amount invoiced, but not as yet financially settled selling B. Current II. Accounts
Trade receivables
price of the sold cakes and baked products to the customers assets Receivable
D.
The accumulated total profit after tax of all the years preceding the IV. Retained
Stockholder’s -
current year earnings
Equity
II. Long-term
The amount of credit (loan) for a 5-year maturity F. Liabilities Long-term loans
liabilities
B. Current
Purchased marzipan for resale I. Inventories Goods
assets

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Exercise 7

The balance sheet items of „Boating” Ltd. are given.

Assets and liabilities Balance

sheet value
th HUF
Building owned by the company 20,000
Computers for administrative purposes 4,000
The final amount invoiced, but not yet financially settled selling price of the 650
boat renting service to the customers
The amount of monetary and non-monetary contributions made by members 25,000
(investors) of the company according to the founding document and
registered by the Registry Court
The final amount invoiced, but not yet financially settled purchase price of 120
the life jackets by the company
Profit for the current year 2,590
Currency in the cash register available 210
Loan indebtedness due to the car of the office manager financed by the loan 3,800
(term 4 years)
Motorboats and ships 960
Net payroll payable for employees 870
Conference table and other office equipment 490
The car used by the office manager 6,950
The accumulated total profit after tax of all the years preceding the current 4,370
year
Corporate income tax debt owed to the tax authority 420
The balance of the current account held by the Raiffeisen bank 2,100
Securities purchased for trading purposes 1,200
Business management software package 610

Task:
Based on the data provided, compile the company’s balance sheet for 31 December 20XX!

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 Balance sheet, 31. 12. 20XX.

A. Fixed (noncurrent) assets D. Equity

I. Intangible assets I. Contributed capital
Concessions, licenses and similar rights IV. Retained earnings
Intellectual property products VII. Profit or loss after tax
II. Tangible assets E. Provisions
Land and buildings and related rights F. Liabilities
Technical equipment, machinery, vehicles I. Subordinated liabilities
Other fixtures and fittings, tools and
II. Long-term (noncurrent) liabilities
equipment, vehicles:
Construction (renovation) in progress Long-term loans
III. Financial investments Investment and development credits
Long-term participations Other long-term liabilities
Long-term granted loans III. Current liabilities
Long-term debt securities Short-term loans
B. Current assets Trade payables
Other short-term liabilities
I. Inventories
Raw materials G. Accrued expenses and deferred income
Finished products
Goods
II. Accounts Receivable
Trade receivables
Other receivables
III. Securities
Short-term participations (shares)
Short-term debt securities (bonds)
IV. Liquid assets
Cash
Cash at bank
C. Prepaid expenses and accrued income
TOTAL ASSETS TOTAL EQUITY AND LIABILITIES

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 Solution of exercise 7

Balance sheet, 31. 12. 20XX.

A. Fixed (noncurrent) assets 33,010 D. Equity 31,960

I. Intangible assets 610 I. Contributed capital 25,000
Concessions, licenses and similar rights 610 IV. Retained earnings 4,370
Intellectual property products 0 VII. Profit or loss after tax 2,590
II. Tangible assets 32,400 E. Provisions 0
Land and buildings and related rights 20,000 F. Liabilities 5,210
Technical equipment, machinery, vehicles 960 I. Subordinated liabilities 0
Other fixtures and fittings, tools and
II. Long-term (noncurrent) liabilities
equipment, vehicles: 4,000 + 490 + 6,950 11,440 3,800
Construction (renovation) in progress 0 Long-term loans 3,800
III. Financial investments Investment and development credits 0
Long-term participations 0 Other long-term liabilities 0
Long-term granted loans 0 III. Current liabilities 1,410
Long-term debt securities 0 Short-term loans 0
B. Current assets 4,160 Trade payables 120
Other short-term liabilities
I. Inventories 1,290
0 870 + 420
Raw materials 0 G. Accrued expenses and deferred income 0
Finished products 0
Goods 0
II. Accounts Receivable 650
Trade receivables 650
Other receivables 0
III. Securities 1,200
Short-term participations (shares) 1,200
Short-term debt securities (bonds) 0
IV. Liquid assets 2,310
Cash 210
Cash at bank 2,100
C. Prepaid expenses and accrued income 0
TOTAL ASSETS 37,170 TOTAL EQUITY AND LIABILITIES 37,170

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Exercise 8
The balance sheet items of „Transport” Ltd. are given.
Assets and liabilities Balance
sheet value
th HUF
Loan taken out for development purposes (maturing within one year) 7,930
Provisions 1,670
Vehicles for own use 8,650
Loan borrowed for 7 months 3,430
Warehouse buildings 26,500
The amount of monetary and non-monetary contributions made by members
(investors) of the company according to the founding document and 28,500
registered by the Registry Court
Value-added tax (VAT) receivables 2,460
Rental rights for machinery and vehicles 5,590
Office buildings 22,500
The balance of the current account held by the K&H bank 6,900
The final amount invoiced, but not yet financially settled selling price of the
6,790
services to the customers
Capital reserve/Additional paid-in capital 10,500
Tax debt owed to the tax authority 2,400
The accumulated total loss after tax of all the years preceding the current year -4,090
Securities purchased for trading purposes 3,060
14-month fixed-term bank deposit 2,300
Development and investment loan for 10 years 16,900
Profit for the current year 17,550
Materials in storage 3,480
Net payroll payable 6,470
The final amount invoiced, but not yet financially settled purchase price of
4,640
goods by the company
Amount in foreign currency deposit account in HUF 7,670
Task: Based on the data provided, compile the company’s balance sheet for 31 December
20XX!
Balance sheet, 202X. December 31. (Th HUF)
A. Non-current assets D. Stockholders’ equity
I. Intangible assets I. Contributed capital
II. Tangible assets
II. Contributed capital unpaid (-)
III. Financial investments IV. Retained earnings
B. Current assets VII. Profit after tax for the year
I. Inventories E. Provisions
II. Accounts receivables F. Liabilities
III. Securities II. Long term liabilities
III. Current liabilities
IV. Liquid assets
C. Prepaid expenses and G. Accrued expenses and deferred
accrued income income
TOTAL EQUITY AND
TOTAL ASSETS
LIABILITY

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Solution of exercise 8

Balance sheet, 202X. December 31. (Th HUF)

A. Non-current assets 65,540 D. Stockholders’ equity 52,460
I. Intangible assets 5,590 I. Contributed capital 28,500
II. Tangible assets
57,650 II. Contributed capital unpaid (-) 10,500
8,650+26,500+22,500
III. Financial investments 2,300 IV. Retained earnings -4,090
B. Current assets 30,360 VII. Profit after tax for the year 17,550
I. Inventories 3,480 E. Provisions 1,670
II. Accounts receivables:
2,460+6,790
9,250 F. Liabilities 41,770
III. Securities 3,060 II. Long term liabilities 16,900
III. Current liabilities
IV. Liquid assets 6,900+7,670 14,570 7,930 + 3,430+2,400+6,470+4,640
24,870
C. Prepaid expenses and G. Accrued expenses and deferred
accrued income
0 income
0
TOTAL EQUITY AND
TOTAL ASSETS 95,900 LIABILITY
95,900

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