Baron Coburg Case

1. Whose financial statements should we prepare (e.g., the baron, vassals, farms, etc..?)
Solution: The financial statements will be prepared for “Vassals” i.e. for Ivan and Frederick and additionally for “Baron”.

2. What financial statements should we prepare?
Solution: The financial statements which should be prepared are as following:
 Income Statement
 Statement of Retained Earnings
 Statement of Cash Flows
 Balance Sheet

3. What period do these statements cover and why (e.g., year, quarter, month, etc..?)
Solution: The statements will cover two quarters.
 1st Quarter – Summer: When the farmers will grow the wheat.
 2nd Quarter – Fall: When the wheat will be harvested.

4. What currency are these financial statements going to use?
Solution: The currency used for the financial statements is “Bushels of Wheat”.

5. Who/ What would be the modern day equivalent of the Baron?
Solution: Modern day equivalent of Baron would be private equity firms or investors who invest in businesses to gain maximum value for their investments.

6. Who/ What would be the modern day equivalent of the vassals?
Solution: Companies, corporations or even managers can be considered as modern day equivalent to vassals.

7. Who/ What would be the modern day equivalent of the ox?
Solution: Non-current assets which is utilized to manufacture or to increase the efficiency of work with a depreciation value can be considered as modern day equivalent of the ox. More precisely, equipment would be a perfect example of modern day ox which has a depreciation value over time.

8. Answer
Financial Statements of Ivan:
Beginning Balance Sheet for Ivan
Ivan
Beginning Balance Sheet
For the Period Ending Month AA, Year ABCD
(In Bushels of Wheat) ASSETS Current Assets Seed 20 Fertilizer 2 Non-Current Assets Ox 40 Land 100
Total Assets 162