Case Study: Chemalite, Incorporated:

Group Assignment: Points to ponder, respond and prepare the required information

1. Has Alexander contributed something to be eligible to be issued the share capital without
injecting any cash in the company?
2. Draw the following for the pre-operating period i.e. January, 20023 till 30 th June, 2003:
a. Statement of Financial Position.
b. Statement of Profit or Loss.
c. Statement of Cashflows.
3. Draw the following for the Calendar year 2003:
a. Statement of Financial Position.
b. Statement of Profit or Loss.
c. Statement of Cashflows.
4. What value legal expenses have created for the company during the pre-operating period and
post operating period?
5. What is the relationship between cashflow and income?
6. What shall be the treatment of prototypes in Financial Statements for the year ended 31 st
December, 2003?
7. Should only 750 be shown as expense or an inflow of 50,000 and outflow of 50,750 shall be
recorded?
8. Is firm order for lights to be used at the Olympic Games be treated as recognizable event under
generally accepted accounting principles?
9. Identify the 11 accounting concepts which stand behind the work which accountants do
emanating from the case study.
10. What are the components of true value of the organization not covered by the accounting
techniques of measurement?
11. Illustrate the relationship between the three principle components of Financial Statements (“a’
to ”c” of point 2 and 3 above) and the accounting equation.
12. Chemical lights are sold under the brand names of Cylume or Safety-Light and are available on
sporting goods shops, auto part stores, hardware stores or toy and novelty shops. How much
would you pay for the exclusive right to produce this product assuming it can be sold between
Rs. 500/- to 1000/-.
13. Has anyone of you used its as sportsmen / sportswomen or as a fishermen / fisherwomen? If
you have used then kindly describe how are Chemical Lights used?