Comprehensive practice cases
Three practice cases solved end to end: a service company with manual accounting, a real estate company with automatic installment-sale accounting and a trading company in Bolivia with VAT and IT, with entries, results and balance sheet.
The best way to learn accounting is to do it. These three cases walk through a full month at three different companies. Try to solve each operation before looking at the solution.
- Record a full month of operations end to end.
- Prepare the income statement and balance sheet from the entries.
- Tell what the accountant does by hand from what GoSoft builds by itself.
Case 1 · Service company (manual accounting, 19% VAT)
A consulting firm starts operations in January:
- Partners contribute 20,000,000 to the bank.
- It buys computers for 6,000,000 + VAT 1,140,000, paid by bank.
- It invoices services for 10,000,000 + VAT 1,900,000, on credit.
- It pays the month's rent: 2,000,000.
- It collects the full invoice from the customer.
- It depreciates the computers (useful life 5 years).
Solution
| Account | Debit | Credit |
|---|---|---|
| Bank | 20,000,000.00 | |
| Share capital | 20,000,000.00 | |
| Equal totals | 20,000,000.00 | 20,000,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Computer equipment | 6,000,000.00 | |
| Input VAT | 1,140,000.00 | |
| Bank | 7,140,000.00 | |
| Equal totals | 7,140,000.00 | 7,140,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Accounts receivable | 11,900,000.00 | |
| Service revenue | 10,000,000.00 | |
| Output VAT | 1,900,000.00 | |
| Equal totals | 11,900,000.00 | 11,900,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Rent expense | 2,000,000.00 | |
| Bank | 2,000,000.00 | |
| Equal totals | 2,000,000.00 | 2,000,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Bank | 11,900,000.00 | |
| Accounts receivable | 11,900,000.00 | |
| Equal totals | 11,900,000.00 | 11,900,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Depreciation expense · computer equipment | 100,000.00 | |
| Accumulated depreciation · computer equipment | 100,000.00 | |
| Equal totals | 100,000.00 | 100,000.00 |
January results: revenue 10,000,000 − rent 2,000,000 − depreciation 100,000 = profit 7,900,000.
VAT payable: 1,900,000 − 1,140,000 = 760,000.
Balance sheet at 01/31
| Assets | Liabilities and equity | ||
|---|---|---|---|
| Bank | 22,760,000 | Output VAT | 1,900,000 |
| Input VAT | 1,140,000 | Share capital | 20,000,000 |
| Equipment (net) | 5,900,000 | Profit for the period | 7,900,000 |
| Total | 29,800,000 | Total | 29,800,000 |
Case 2 · Real estate company (automatic accounting)
In March Empresa 01 S.A. sells lot 15 in Unidad 02:
- Price 50,000,000, lot cost 20,000,000.
- Down payment 5,000,000 in cash.
- First monthly installment: 2,100,000 (principal 1,650,000 + interest 450,000), collected by bank.
- The salesperson earns 3% of each collection.
What you record in GoSoft
- The contract with its payment plan (active status).
- The collection of the down payment and of installment 1 from the payment plan.
What GoSoft books by itself
| Account | Debit | Credit |
|---|---|---|
| Accounts receivable | 50,000,000.00 | |
| Revenue from property sales | 50,000,000.00 | |
| Cost of properties sold | 20,000,000.00 | |
| Property inventory | 20,000,000.00 | |
| Equal totals | 70,000,000.00 | 70,000,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Cash | 5,000,000.00 | |
| Accounts receivable | 5,000,000.00 | |
| Sales commission expense | 150,000.00 | |
| Commissions payable | 150,000.00 | |
| Equal totals | 5,150,000.00 | 5,150,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Bank | 2,100,000.00 | |
| Accounts receivable | 1,650,000.00 | |
| Finance income · interest | 450,000.00 | |
| Sales commission expense | 63,000.00 | |
| Commissions payable | 63,000.00 | |
| Equal totals | 2,163,000.00 | 2,163,000.00 |
Cumulative result: gross profit 30,000,000 + interest 450,000 − commissions 213,000 = 30,237,000.
Customer balance: 50,000,000 − 5,000,000 − 1,650,000 = 43,350,000, which must match the payment plan's principal balance.
Case 3 · Trading company in Bolivia (13% VAT included, 3% IT)
Empresa 02 S.A. in one month:
- Buys merchandise with an invoice for 11,300 BOB on credit.
- Sells all of it with an invoice for 20,000 BOB in cash.
- Pays the supplier.
Solution
| Account | Debit | Credit |
|---|---|---|
| Merchandise inventory | 9,831.00 | |
| Input VAT | 1,469.00 | |
| Accounts payable | 11,300.00 | |
| Equal totals | 11,300.00 | 11,300.00 |
| Account | Debit | Credit |
|---|---|---|
| Cash | 20,000.00 | |
| Output VAT | 2,600.00 | |
| Sales revenue | 17,400.00 | |
| Transaction tax expense | 600.00 | |
| Transaction tax payable | 600.00 | |
| Cost of goods sold | 9,831.00 | |
| Merchandise inventory | 9,831.00 | |
| Equal totals | 30,431.00 | 30,431.00 |
| Account | Debit | Credit |
|---|---|---|
| Accounts payable | 11,300.00 | |
| Bank | 11,300.00 | |
| Equal totals | 11,300.00 | 11,300.00 |
Result: net sales 17,400 − cost 9,831 − IT 600 = 6,969 BOB.
Month's returns: VAT (F-200) 2,600 − 1,469 = 1,131; IT (F-400) 600.
Ask your company or instructor for a test user and record these cases. Then compare the journal, trial balance and financial statements with the solutions.
In case 1, why is the VAT on the computers not part of the equipment cost?
Because it is deductible: it is recovered as input tax against output VAT.
In case 2, why was installment 1's interest not booked when the contract was signed?
Because it is finance income that accrues over time; GoSoft recognizes it on collection.
In case 3, how much VAT does the company pay and why?
1,131 BOB: output tax 2,600 minus input tax 1,469.