Attached is an unadjusted test balance (and worksheet) on 31 December 2021 for the company Kastalaloft ehf. It is requested that the worksheet be published, the necessary accounting keys added and that a basis be drawn up on that basis.

*Income statement for 2021

*Balance sheet 31.december 2021

*statement of changes in equity in 2021

It is also permitted to use T-invoices or the accounting equation to solve the project. It is recommended to include entries and calculations in the solution and number entries according to the comments below. VAT, capital gains tax or inflation need not be taken into account.

The following are comments that need to be taken into account when solving the project: 1. Kastalaloft ehf. have high expectations that the company's operations are taking off. The company therefore went into a share offering in the year 2021. The company sold shares with a nominal value of ISK 500,000. at a price of 4. The company's bookkeeper was not sure how to transfer the share capital increase in question and transferred it to a debit to a bank account and credit to a new accounting key among income which he explained as "Share capital income" . 2. Kastalaloft ehf. has used a closed fund (petty cash) to pay various incidental small expenses. On December 31, 2021, it was counted in the fund, there were 21,000 ISK in the box. and a note for the purchase of stamps and stationery in the amount of ISK 2,000. No explanation has been found that the fund seems to be missing ISK 2,000. 3. A new managing director took office on 1 December 2021. A termination of employment was agreed with the previous managing director and a retirement agreement was made with him. The agreement is such that Kastalaloft ehf. Pay him a salary for 3 months, ISK 1,525,000. in a month. The first payment will take place on January 1, 2022. Wage-related expenses are estimated at 15% . 4. During the creditors' reconciliations, it was revealed that an invoice from the consulting company Lookgood ehf. is not entered in the company's accounts. The invoice is for services in November and December in the year 2021 and is due on January 10, 2022. The amount of the invoice is ISK. 350,000.

5. Kastalaloft ehf. rent out part of the property. The tenant paid on April 1, 2021 ISK. 4,200,000 for rent for the next 12 months. The payment was booked debit bank and credit rental income.

6. Prepaid expenses are for the insurance for the year 2021 which were paid on 31.12.2020 7. A count at the end of 2021 revealed that inventories for resale amounted to ISK 2,800,000 at a sale price. According to the company's management, the average mark-up on the cost price of inventories has been 40% recently. two years. The count also revealed that unused and unsaleable inventories are at a cost price of ISK. 249,620. These stocks are capitalized in the company's books and no adjustment has been made due to this. 8. Kastalaloft ehf. took out a foreign loan during the year DKK 40,000. When the loan was taken out, the exchange rate was DKK 22 and the loan was therefore written down to ISK. 880,000 in the company's accounts. The loan was not repaid during the year. At the end of 2021, the exchange rate was DKK 20. 9. Machine 1 was purchased on 1 July 2018 for ISK 1,850,000. and its estimated wreck value is 185 thous. kr. and estimated life 10 years. The linear method is used to depreciate machine 1. The machine was sold on June 30, 2021, the sale price was ISK. 1,250,000, the sale price was paid in cash and a debit was booked to a bank and a credit for income from the sale of machines.

10. Kastalaloft ehf. invest in office space at the beginning of 2014 for ISK 44,000,000. Its estimated useful life is 40 years and the estimated residual value is 10% of the original purchase price. Office space has been depreciated on a straight-line basis. In the year 2021, extensive changes were made to the interior. The office space was completely renovated and made considerably better in the opinion of the Commission. The Commission estimates that the value of the property has increased by ISK 6.0 million. kr. because of this. The cost of the project, on the other hand, amounted to ISK 3 million. kr. and he was all charged for the maintenance of the property. Construction was completed on 31 December 2021 11. The bank statement for the month of December shows the balance on the bank account of Kastalaloft ehf. on 31.12.2021 up to ISK 2,257,130. When reconciling a bank account, it is stated that there is an unbooked deposit in the accounting of ISK. 150,000 from XX ehf. but claims on them had been written off from the books of Kastalaloft ehf. On 31 December, purchases of goods were paid by check in the amount of 141,000, the payment was then posted to debit on trade payables and credit to banks, the check was redeemed at a bank on 3 January 2022. 12. It is now clear that among trade receivables is a claim against the company YY ehf. in the amount of ISK 140,000. which will not be charged (is fully lost). In addition, management believes that it is reasonable to estimate that 5% of trade receivables will be lost by the end of the year (based on the age analysis of trade receivables). The company enters a special allowance account for trade receivables. No entries have been made due to the above. 13. Income tax is calculated 20% of profit before taxes

B D E F G H 1 K K 0 Kredit 1 Vinnubla fyrir Kastalaloft ehf. - 31.12.2021 2 14.587.720 14.587.720 3 4 Heiti reiknings Debet Kredit 5 unadjusted trial balance 31/12 6 7 product sales 56.450.450 8 sold service 14.162.900 9 Rental income 4.200.000 10 Share capital income 2.000.000 Debet 0,000 Corrections and final entries Debet Kredit Income statement Debet Kredit Balance sheet 11 1.250.000 1.635.000 39.522.130 18.950.000 2.842.500 746.000 27.000 3.000.000 11 income from the sale of machinery 12 Interest income, bank 13 Purchase of goods / Cost of goods sold 14 Salary 15 Wage-related expenses 16 Market costs 17 Other operating expenses 18 19 Property maintenance 20 21 22 23 24 25 26 27 Interest expenses 28 29 30 Closed cash (petty cash) 31 Bank account 32 Prepaid expenses 33 Trade receivables 34 Impairment account of trade receivables 35 36 37 38 Inventories 39 Office space 40 Aggregate depreciation of office space 41 Machine 1 23.000 25.000 1.970.130 350.000 6.302.000 240.000 2.550.000 44.000.000 6.930.000 1.850.000 42 Aggregate depreciation of Machinery 43 Accounts payable 416.250 1.890.000 500.000 298.000 570.000 13 880.000 5.000.000 44 Accepted bills 45 Unpaid costs 46 Unpaid salary-related expenses 47 48 49 50 Long-term loan 1 (DKK 40,000) 51 52 Common stock 53 54 Retained earnings 55 56 57 58 59 60 61 62 63 64 65 25.735.160 122.157.760 122.157.760 0 0 B D E F G H 1 K K 0 Kredit 1 Vinnubla fyrir Kastalaloft ehf. - 31.12.2021 2 14.587.720 14.587.720 3 4 Heiti reiknings Debet Kredit 5 unadjusted trial balance 31/12 6 7 product sales 56.450.450 8 sold service 14.162.900 9 Rental income 4.200.000 10 Share capital income 2.000.000 Debet 0,000 Corrections and final entries Debet Kredit Income statement Debet Kredit Balance sheet 11 1.250.000 1.635.000 39.522.130 18.950.000 2.842.500 746.000 27.000 3.000.000 11 income from the sale of machinery 12 Interest income, bank 13 Purchase of goods / Cost of goods sold 14 Salary 15 Wage-related expenses 16 Market costs 17 Other operating expenses 18 19 Property maintenance 20 21 22 23 24 25 26 27 Interest expenses 28 29 30 Closed cash (petty cash) 31 Bank account 32 Prepaid expenses 33 Trade receivables 34 Impairment account of trade receivables 35 36 37 38 Inventories 39 Office space 40 Aggregate depreciation of office space 41 Machine 1 23.000 25.000 1.970.130 350.000 6.302.000 240.000 2.550.000 44.000.000 6.930.000 1.850.000 42 Aggregate depreciation of Machinery 43 Accounts payable 416.250 1.890.000 500.000 298.000 570.000 13 880.000 5.000.000 44 Accepted bills 45 Unpaid costs 46 Unpaid salary-related expenses 47 48 49 50 Long-term loan 1 (DKK 40,000) 51 52 Common stock 53 54 Retained earnings 55 56 57 58 59 60 61 62 63 64 65 25.735.160 122.157.760 122.157.760 0 0