Required: 1/ Open the accounts with opening balances (1 point). 2/ Record all transactions. Costs are recorded as costs by nature (15 points). 3/ Close all accounts, show their ending balances and calculate profit or loss for December according to costs by nature structure in the Profit/(loss) account. Ignore Change in inventories item while calculating financial result in Profit/(loss) account (2 points). 4/ Prepare balance sheet of "Play" as at 31.12.2017 (2 points). ke The balance sheet of the company Play as at 1.01.2017 is as follows: ASSETS EQUITY & LIABILITIES Property, plant and equipment Shareholders' equity Car 90 0001) Share capital 250 000 Long-term investment 110 0002) Supplementary capital 20 000 Receivables from company Eta" 10 000 Long-term bank loan 50 000 Receivables from company Delta" 30 000 Payables to company New 41 00012 Short-term investment 60 0003) Cash and cash equivalent 60 000 e Deferred cost 1 00044 Total assets 361 000 Total equity & liabilities 361 000 e 1) Car was acquired in December 2014 for 150 000, depreciation started in January 2015, the period of balance sheet depreciation is 5 years. Company uses straight-line depreciation for tangible fixed assets. 2) Long-term investment includes shares of: 4 Company Alfa 400 shares at $200 and Company Beta 2 000 shares at $15.- 3) Short-term investment includes shares of Company Gamma 3 000 shares at $20. 4) Insurance policy paid in December 2016 for 2017 and 2018. In 2017 the company noted the following economic transactions: 1. Company accrued and paid with bank transfer interest on the bank loan 1 000. 2. Company calculated and paid salaries to employees 20 000.- 3. Company purchased in May with deferred payment 1 500 units of traded goods at 2 per unit from company One. 4. Company received and paid by bank transfer an electricity bill 6 000.- 5. Company sold for cash in June 500 units of traded goods previously purchased for 2 per unit. Selling price was 3 per unit. 6. Sold traded goods were taken from the warehouse and delivered to the customer. 7. Company purchased a licence for 20 000 for cash. Amortization will start in January 2017 straight-line amortization will be used with an expected useful life of 4 years. 8. Company Delta" declared bankruptcy. It is know that all receivables from this company are lost. 9. An external company made renovation of rented office building in June. Due to lack of invoice, the cost was estimated at 1 500. 10. Company recorded cost related to insurance only for 2017. 11. Company received an interest note from company New for 10% of outstanding debt. 12. In June company sold for cash 500 shares of Gamma for $15 per share. 13. At the last day of the year, the company valued long-term and short-term investments. Long- term investments are valued at fair value. Short-term investments are valued at the cost of purchase. At 31st of December 2017 the market value of shares is: Company Alfa at $230, Company Beta at $10, Company Gamma at $29. 14. Company calculated amortization/depreciation for 2017. 15. Company calculated interest on receivables from Eta 5% of outstanding amount. Required: 1/ Open the accounts with opening balances (1 point). 2/ Record all transactions. Costs are recorded as costs by nature (15 points). 3/ Close all accounts, show their ending balances and calculate profit or loss for December according to costs by nature structure in the Profit/(loss) account. Ignore Change in inventories item while calculating financial result in Profit/(loss) account (2 points). 4/ Prepare balance sheet of "Play" as at 31.12.2017 (2 points). ke The balance sheet of the company Play as at 1.01.2017 is as follows: ASSETS EQUITY & LIABILITIES Property, plant and equipment Shareholders' equity Car 90 0001) Share capital 250 000 Long-term investment 110 0002) Supplementary capital 20 000 Receivables from company Eta" 10 000 Long-term bank loan 50 000 Receivables from company Delta" 30 000 Payables to company New 41 00012 Short-term investment 60 0003) Cash and cash equivalent 60 000 e Deferred cost 1 00044 Total assets 361 000 Total equity & liabilities 361 000 e 1) Car was acquired in December 2014 for 150 000, depreciation started in January 2015, the period of balance sheet depreciation is 5 years. Company uses straight-line depreciation for tangible fixed assets. 2) Long-term investment includes shares of: 4 Company Alfa 400 shares at $200 and Company Beta 2 000 shares at $15.- 3) Short-term investment includes shares of Company Gamma 3 000 shares at $20. 4) Insurance policy paid in December 2016 for 2017 and 2018. In 2017 the company noted the following economic transactions: 1. Company accrued and paid with bank transfer interest on the bank loan 1 000. 2. Company calculated and paid salaries to employees 20 000.- 3. Company purchased in May with deferred payment 1 500 units of traded goods at 2 per unit from company One. 4. Company received and paid by bank transfer an electricity bill 6 000.- 5. Company sold for cash in June 500 units of traded goods previously purchased for 2 per unit. Selling price was 3 per unit. 6. Sold traded goods were taken from the warehouse and delivered to the customer. 7. Company purchased a licence for 20 000 for cash. Amortization will start in January 2017 straight-line amortization will be used with an expected useful life of 4 years. 8. Company Delta" declared bankruptcy. It is know that all receivables from this company are lost. 9. An external company made renovation of rented office building in June. Due to lack of invoice, the cost was estimated at 1 500. 10. Company recorded cost related to insurance only for 2017. 11. Company received an interest note from company New for 10% of outstanding debt. 12. In June company sold for cash 500 shares of Gamma for $15 per share. 13. At the last day of the year, the company valued long-term and short-term investments. Long- term investments are valued at fair value. Short-term investments are valued at the cost of purchase. At 31st of December 2017 the market value of shares is: Company Alfa at $230, Company Beta at $10, Company Gamma at $29. 14. Company calculated amortization/depreciation for 2017. 15. Company calculated interest on receivables from Eta 5% of outstanding amount