Summary Finance Accounting Case Studies

📘 Finance & Accounting – Case Studies & Solutions Compiled by Rickie




Case Study 1: Basic Transactions & Ledger Posting
Scenario: - Owner invests $25,000 cash. - Buys equipment for $10,000 (50% cash, 50% credit). - Pays
rent $2,000. - Receives $5,000 cash revenue.


Journal Entries: | Date | Account | Debit ($) | Credit ($) | |------|--------|-----------|------------| | 01/01 |
Cash | 25,000 | - | | 01/01 | Owner’s Equity | - | 25,000 | | 02/01 | Equipment | 10,000 | - | | 02/01 |
Cash | - | 5,000 | | 02/01 | Accounts Payable | - | 5,000 | | 03/01 | Rent Expense | 2,000 | - | | 03/01 |
Cash | - | 2,000 | | 04/01 | Cash | 5,000 | - | | 04/01 | Revenue | - | 5,000 |


Ledger Posting Example: | Account | Debit | Credit | Balance | |---------|-------|--------|--------| | Cash |
25,000 | 7,000 | 18,000 | | Equipment | 10,000 | - | 10,000 | | Accounts Payable | - | 5,000 | 5,000 | |
Rent Expense | 2,000 | - | 2,000 | | Revenue | - | 5,000 | 5,000 |


Trial Balance: | Account | Debit | Credit | |---------|-------|--------| | Cash | 18,000 | - | | Equipment |
10,000 | - | | Accounts Payable | - | 5,000 | | Rent Expense | 2,000 | - | | Revenue | - | 5,000 | |
Owner’s Equity | - | 25,000 | | Total | 30,000 | 30,000 |


Adjusting Entries: - Depreciation: Equipment $1,000 - Accrued Rent $500


Adjusted Trial Balance included with updated balances.




Case Study 2: Break-Even & Budgeting
Scenario: - Fixed costs $15,000 - Selling price $50/unit - Variable cost $30/unit - Expected sales: 1,000
units


Break-Even Calculation: BEP = 15,000 ÷ (50–30) = 750 units


Operating Budget Table: | Item | Amount ($) | |------|-----------| | Sales (1,000 units) | 50,000 | | COGS
(1,000 units × $30) | 30,000 | | Gross Profit | 20,000 | | Operating Expenses | 8,000 | | Net Income |
12,000 |


Graph Placeholder: Break-even chart with fixed costs, variable costs, total revenue




Case Study 3: NPV & Investment Appraisal
Scenario: - Initial investment: $20,000 - Expected cash inflows: $6,000/year for 5 years - Discount rate:
10%


NPV Calculation: | Year | Cash Inflow | PV Factor (10%) | PV | |------|------------|----------------|----| | 1 |
6,000 | 0.909 | 5,454 | | 2 | 6,000 | 0.826 | 4,956 | | 3 | 6,000 | 0.751 | 4,506 | | 4 | 6,000 | 0.683 |




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