The company AMPLIED PLUS, SA presents the following Balance Sheet on January 1, 20X0:

During the fiscal year, it carries out the following operations (VAT of 21%):

1. Pay the first amortization installment of the loan granted a year ago by the PROCESO bank with a 10-year maturity, according to the following amortization table (only the first 5 years are shown). The annuity for 1/1/20X3 is €7,770.27.

2. The following distribution of the profit that appears in the Balance is agreed: to legal reserve the minimum, to statutory reserves 14%, and to partners €24,000. Dividends are then paid by bank after tax withholding of 19%.

3. Buy goods on credit for €3,000. The invoice includes transport costs of €150, a commercial discount of 5% on the merchandise, and returnable packaging worth €200.

4. Return all packaging to the supplier.

5. On April 1, sell the furniture that appears on the Balance for €25,000. They are amortized on a straight-line basis over 10 years. You will collect half in 10 months and the other half in 18 months.

6. The salary paid by the bank has the following concepts: gross salary: €5,900, personal income tax withholding: €700; social security contribution: €800 for the company and €200 for the worker.

7. A customer sends a transfer for €2,904 (21% VAT included) as a down payment on a sale.

8. Sale of goods for €88,000. The invoice includes freight charges for €900, and the advance is subtracted.

9. Settle the VAT and carry out all pre-closing operations, taking into account that there are no stocks in the warehouse at closing, that the machinery is amortized on a straight-line basis over 15 years, and that the Corporate Tax rate is 25%.

Carry out the accounting cycle and prepare the Balance Sheet and the Income Statement.

The company AMPLIED PLUS, SA should perform the accounting cycle, including various financial operations such as loan amortization, profit distribution, purchases, sales, salary payments, and VAT settlement. After completing the accounting cycle, they should prepare the Balance Sheet and Income Statement.

To properly handle the given financial transactions, AMPLIED PLUS, SA needs to follow the accounting cycle. This involves recording and processing all the relevant financial events in the appropriate accounts. They should start by recognizing the payment made for the loan amortization installment, according to the provided amortization table. This payment will impact both the loan liability and the corresponding interest expense accounts.

Next, the company must distribute the profit recorded in the Balance Sheet. They should allocate the minimum legal reserve, allocate 14% to statutory reserves, and distribute €24,000 to the partners. After determining the profit distribution, they should calculate and withhold 19% tax from the dividends paid to the partners.

The company's purchase of goods on credit, including transportation costs, commercial discount, and returnable packaging, should be recorded as an increase in inventory and a corresponding increase in accounts payable. Returning the packaging to the supplier will reverse the previous increase in inventory and accounts payable.

When selling the furniture on April 1, AMPLIED PLUS, SA should recognize the revenue from the sale of goods. As the payment is received in installments, they need to account for the partial collection and defer the revenue recognition for the remaining amount until it is received.

The salary payment made by the bank should be recorded as an expense, with the gross salary amount. The personal income tax withholding and social security contributions should be deducted from the employee's gross salary. The company's share of social security contributions should also be recorded as an expense.

Upon receiving a customer's down payment, the company should record the transaction as an increase in cash and a liability for the remaining balance owed to the customer.

The sale of goods for €88,000 should be recorded as revenue. The freight charges should be included in the cost of goods sold, reducing the overall profitability of the sale.

Finally, AMPLIED PLUS, SA needs to settle the VAT and perform all pre-closing operations. This includes adjusting the machinery's accumulated depreciation based on its straight-line amortization method. They should also account for corporate income tax at a rate of 25%. After completing these operations, the company can prepare the Balance Sheet, reflecting its financial position at the end of the fiscal year, and the Income Statement, summarizing its financial performance during the period.

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