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Practice Exercise - Nairobi - Blank

Nairobi Trading Inc. has undertaken several transactions including issuing common shares, buying equipment and inventory using cash and credit, selling some inventory for cash, and paying an operating expense in cash. You have been asked to build the company's balance sheet using the information provided. The balance sheet should include assets like cash, accounts receivable, inventory, and property, plant, and equipment as well as liabilities like accounts payable and equity accounts like common shares and retained earnings.

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107 views4 pages

Practice Exercise - Nairobi - Blank

Nairobi Trading Inc. has undertaken several transactions including issuing common shares, buying equipment and inventory using cash and credit, selling some inventory for cash, and paying an operating expense in cash. You have been asked to build the company's balance sheet using the information provided. The balance sheet should include assets like cash, accounts receivable, inventory, and property, plant, and equipment as well as liabilities like accounts payable and equity accounts like common shares and retained earnings.

Uploaded by

talila
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Practice Exercise - Nairobi Trading Strictly Confidential

Table of Contents

Nairobi Balance Sheet

© 2015 to 2023 CFI Education Inc.


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Construct a Balance Sheet for Nairobi Trading Inc.

You have been asked to build a Balance Sheet for a company called Nairobi Trading Inc. that has undertaken the following transactions

1. Issued common shares of 500.


2. Bought equipment for 300 with cash.
3. Bought inventory of 100. 80 of this was paid in cash. The remainder is outstanding at the balance sheet date.
4. Sold 75% of the inventory for 120. 100 of this had been received in cash at the balance sheet date.
5. Paid a cash operating expense of 15.

Journal Entries

1. Issued common shares of 500. Debit Credit


Cash
Common shares
– –

2. Bought equipment for 300 with cash. Debit Credit


Cash
Property, Plant & Equipment
– –

3. Bought inventory of 100. Debit Credit


Inventory
Cash
Accounts Payable
– –

4. Sold 75% of the inventory for 120 Debit Credit


Cash
Accounts Receivable
Revenue
Inventory
Cost of Sales
– –

5. Paid a cash operating expense of 15. Debit Credit


Cash
Operating Expense
– –

Practice Exercise - Nairobi Trading Page 3 of 4


Balance Sheet

ASSETS TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

Current Assets Current Liabilities


Cash Accounts Payable
Accounts Receivable Total Current Liabilties –
Inventory
Total Current Assets – Non-Current Liabilities
Long-Term Debt –
Non-Current Assets Total Non-Current Liabilities –
Property, Plant & Equipment
Total Non-Current Assets – Shareholders' Equity
Common Shares
Retained Earnings
Revenue
Cost of Sales
Other Operating Expenses
Total Retained Earnings –
Total Shareholders' Equity –

Total Assets – Total Liabilities & Equity –

Total Assets –
Total Liabilities & Equity –
Difference –

Practice Exercise - Nairobi Trading Page 4 of 4

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