SINGAPORE INSTITUTE OF

MANAGEMENT

Diploma in Management Studies

FINANCIAL ACCOUNTING

Tutorial Questions

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Topic 1
Introduction to Financial Accounting

1.9 Practice Activity: Accounting Equation

Time: 20 minutes
Purpose: To identify the accounting equations.
Task: Read the questions in Parts 1 to 4 and answer the following questions in the discussion
forum.
Feedback: Your facilitator will moderate this discussion.

Part 1
During the month of August 2022, Fred entered into the following transactions.
i) Bought a machinery which costs $90,000 on credit
ii) Used $15,000 from his personal bank account to pay for furniture for office use
iii) Received a cheque of $5,000 from Terry
iv) Took up a bank loan of $66,000
Show the effect on the accounting equation that would be taking place on the basis of above
transactions.

Part 2
Sam purchased a land worth $60,000 on credit. Describe and illustrate how business transactions can
be recorded in terms of the resulting change in the elements of the accounting equation.

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1.9.2 Practice Activity: Introduction to Financial Accounting
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Jan 2019
1 Beatrice deposited $80,000 in a bank account in the name of Be Trading.

6 Be Trading bought equipment worth $15,900 paying by cheque.

11 Furniture of $12,440 was bought on credit.

14 Be Trading received $3,600 for commission through GIRO.

21 The following expenses were paid by cheques: wages $11,500, utilities $3,800 and insurance $9,650.

24 Be Trading paid creditors $8,100 with a cheque.

31 Beatrice withdrew $1,330 from Be Trading for her personal use.

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Topic 2
Double Entry Bookkeeping
2.7.1 Practice Activity 1: Double Entry Bookkeeping
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Journal
Date Transactions Accounts Category Inc./Dec
Entries

Abel contributed $90,000 by cheque and

1/10 brought in his car $60,000 to commence his
business Able Company.

Able Company bought a fax machine

8/10
worth $2,300 paying by cheque.

10/10 Furniture of $7,200 was bought on credit.

Able Company received $3,900 for rental

16/10
from tenant by cheque.

The following expenses were paid by

20/10 cheques: salaries and wages $10,500,
utilities $1,950 and insurance $6,620.

Able Company paid trade creditors $4,900

24/10
with a cheque.

Abel took a bank loan of $15,000 from

30/10
OCBC.

Abel withdrew $1,600 from Abel

31/10
Company for his personal use.

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2.7.2 Practice Activity: Double-Entry Accounting
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

The following Trial Balance has a number of errors. Prepare a corrected trial balance.
Trial Balance as at December 2019

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2.7.3 Practice Activity 3: Double Entry Bookkeeping

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Record the following transactions for February 2020 in the General Journal of Bernard
Lim and prepare a Trial Balance as at 28 February 2020.

Feb 2019

1 Started business with $12,000 cash.

Paid $11,700 of the opening cash into a bank account for the
2
business.

5 Bought furniture on credit from Wood Ltd for $1,900.

8 Bought a van paying by cheque $5,250.

12 Bought equipment from EE Ltd on credit $2,300.

15 Returned faulty office furniture costing $120 to Wood Ltd.

Received $2,400 by cheque for rental of office space to

19
tenant.

21 Paid amount owing to Wood Ltd $1,780 by cheque.

25 Paid $1,090 for office utilities by cheque.

30 Fanny lent us $4,000 – giving us the money by cheque.

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Topic 3
Trading Account
3.8.1 Practice Activity 1: Trading Account

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 1
Iris Tung is a sole proprietor dealing in computer accessories. Below are the
transactions for her business.

Transactions

Iris purchased $12,000 computer accessories

1
paying by cheque.

Bought inventories $22,000 on account from Texas

2
Trading, receiving a trade discount of 10%.

3 Returned faulty goods $1,200 to Texas Trading..

Iris gave a cheque of $18,000 to Texas Trading in

4
full settlement of its debts.

Iris sold $4,000 worth of inventory. receiving a

5
cheque for it.

Sold some computer accessories $10,000 on credit

6
to Tip Ltd.

7 Tip Ltd returned defective goods $900 to Iris.

8 Tip Ltd paid Iris $8,500 after discount by cheque.

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3.8.2 Practice Activity 2: Trading Account
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity
The following balances were extracted from Alice’s accounting records for 2019:

Sales 29,00

Sales Return 5,125

Purchases 14,950

Purchases returns 3,169

Carriage Inwards 1,058

Carriage Outwards 1,346

Inventory 1.1.2019 3,900

Inventory 31.12.2019 5,678

Required:
Calculate the cost of goods sold/COGS and gross profit/GP for the year to 31 December
2019.

COGS = Opening inventory + Purchases – Purchases returns + Carriage inwards –

Closing inventory
Gross Profit = Net Sales – COGS

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3.8.3 Practice Activity 3:Trading Account
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity
Shown below is a list of balances for Aziz for the year ended 31 August 2019:

Gross Profit 59,500

Carriage Outwards 4,138

Interest earned 3,456

Advertising 4,849

Salaries and Wages 18,245

Commission Received 2,468

Repairs 1,130

Discount Received 1,790

Required:
Calculate the net profit for the year to 31 August 2019.

Net Profit = Gross Profit + Other income – expenses

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3.8.4 Practice Activity 4: Trading Account
Time: 30 minutes
Task: Attempt the practice

Activity - The following balances have been extracted from the books of Aaron

Dr Cr
$ $

Rent Received 2,100

Furniture and fittings 15,100

Bank 67,960

Trae receivable 24,600

Office Wages 12,000

Advertising 595

Sales Commission 8,720

Returns Outwards 3,000

Capital 67,000
Interest Revenue 2,450
Drawings 2,080
Office Equipment 19,600
Carriage Outwards 680
Carriage Inwards 1,845
Stock, 1 August 2018 3,200
Returns Inwards 3,400
Purchases 49,900
Sales 100,000
Trade payable 16,780
Loan 20,000
Other receivable 1,650

The closing stock was valued at $4,700.

Based on the above balances, prepare the Statement of Comprehensive Income for the year
ended 31 July 2019 and a Statement of financial Position as at the same date
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3.8.5 Practice Activity 5: Trading Account
Task: Attempt the practice

Activity
The following trial balance was extracted from the books of Adrian Cheng on 31 March
2019:

Dr Cr
$ $
Sales 28,000

Purchases 14,556

Stock, 1 April 2018 3,776

Carriage Outwards 2,226

Carriage Inwards 234

Returns 440 1,355

Salaries and Wages 7,447

Motor expenses 664

Rental expenses 576

Sundry expenses 1,202

Motor Vehicles 2,400

Office Equipment 3,600

Trade receivable 8,077

Trade payables 3,045

Cash at bank 4,996

Drawings 2,050
Capital 19,844
52,244 52,244

Required:
Stock at 31 March 2019 was $4,998.
I. Prepare a Statement of Comprehensive Income for the year ended 31 March 2019.
II. Prepare a Statement of Financial Position as at 31 March 2019.

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Topic 4
The Adjusting Process Part 1
4.5.1 Practice Activity 1A & 1B: The Adjusting Process
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 1A

The following transactions were extracted from the accounting records of Ali whose financial
year end falls on 31 August 2019. Identify the type of balance-day adjustments.
(a) The office utility bill of August 2019 was paid in September 2019.
(b) Advertising of $2,400 has been paid for September 2019 to February 2020.
(c) A deposit of $5,000 has been collected from Eunice a customer, but the inventory was sent
to her on 3 September 2019.
(d) Ali has rented out his warehouse to Tham Co. at a monthly rental of $4,000. The rental for
August 2019 has not been received as at 31 August 2019.

Activity 2B
During the financial year ended 31 December 2019, Felix paid office rent of $26,000. The
monthly rent is $2,000. What is the adjusting entry for the rent?

General Journal

Date Particulars Dr. Cr.

Prepaid Expense a/c

2019
Rent a/c $ $
31/12
Being rent prepaid in 2019 for 2020

For the financial year ended 31 December 2019, Felix will report the following items on the
financial statements:
Rent expense incurred of in the Statement of Comprehensive Income and
Prepaid expense of shown as a current asset in the Statement of Financial
Position.
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4.5.2 Practice Activity 2: Adjusting Journal Entry for Accrued
Expense
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 3
During the financial year ended 31 August 2019, Tony has paid utility of $10,000. The records
showed that he has yet to receive the electricity bills for July and August 2019. Tony assumes
that electricity costs are constant throughout the year. What is the adjusting entry for the utility
expense?

General Journal

Date Particulars Dr. Cr.

Utilities a/c
2019 Accured Expense a/c
$ $
31/8 Being utility unpaid for July and
August 2019

For the financial year ended 31 August 2019, Tony will report the following items on the
financial statements:
Utilities expense incurred of in the Statement of Comprehensive Income
and
Accrued expense of shown as a current liability in the Statement of
Financial Position.

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4.5.3 Practice Activity 3: Adjusting Journal Entry for Accrued Revenue

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 3
During the financial year ended 30 November 2019, Jill received rental income of
$33,000 from the office space that she has sublet to a tenant. The monthly rent is
$3,000. What is the adjusting entry for the rent revenue?

General Journal

Date Particulars Dr. Cr.

Accured Revenue a/c

2019 Rent Received a/c
$ $
31/11 Being rent not received for
November 2019

For the financial year ended 30 November 2019, Jill will report the following items on
the financial statements:
Rent revenue earned of in the Statement of Comprehensive
Income and
Accrued revenue of shown as a current asset in the Statement of
Financial Position.

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4.5.4 Practice Activity 4: Adjusting Journal Entry for Depreciation

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 4
The accountant of Kings Ltd has computed the depreciation expense of $12,000 on
the motor vehicles for the year ended 31 October 2019. What is the adjusting entry
for the depreciation expense?

General Journal

Date Particulars Dr. Cr.

Depreciation expense a/c

2019
Accumulated depreciation a/c $ $
31/10
Being depreciation expense for motor vehicles.

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4.5.5 Practice Activity 6: Adjusting Journal Entry for Unearned Revenue

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 5
During the financial year ended 31 December 2019, Jerry received fees of $24,000 in
cash for a maintenance contract for work to be done from August 2019 to January
2020. $ 24,000 was recorded in Service Revenue a/c. What is the adjusting journal
entry for the service revenue?

General Journal

Date Particulars Dr. Cr.

Service revenue a/c

2019
Unearned revenue a/c $ $
31/12
Being fees received in advance for January 2020.

For the financial year ended 31 December 2019, Jerry will report the following items
on the financial statements:
Service revenue earned of in the Statement of Comprehensive
Income and
Unearned revenue of shown as a current liability in the Statement of
Financial Position.

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Topic 5
The Adjusting Process Part 2
5.6 Practice Activity: Preparation of Financial Statements
Time: 30 minutes
Purpose: To understand making adjusting entries, preparation of adjusted trial balance,
income statement and statement of financial position
Task: From the following unadjusted trial balance, prepare the adjusting journal entries, the
Statement of Comprehensive Income and Statement of Financial Position.
Feedback: Your facilitator will moderate this submission.

Question
The following trial balance has been extracted from the books of Norman as at 31 May 2019:

Debit Credit

$ $

Bank 17,090

Trade receivables 12,800

Inventory as at 1 Jun 2018 21,000

Furniture and fittings 45,000

Accumulated depreciation- F & F, 1 Jun 2018 12,270

Office equipment 83,300

Accumulated depreciation- O.E., 1 Jun 2018 28,650

Trade payables 35,460

Loan repayable six years later 20,000

Capital at 1 Jun 2018 50,985

Drawings 5,400

Sales 286,000

Purchases 106,820

Carriage inwards 3,800

Carriage outwards 11,200

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Office expenses 28,575

Salaries 45,000

Advertising 20,190

Utilities 11,450

Insurance 19,200

Returns 8,540 6,000

439,365 439,365

Inventory as at 31 May 2019 is $38,000.

Additional information:
a. Commission revenue of $2,700 for May 2019 has not been received nor recorded.
b. Salary of $4,200 for a temporary staff will only be paid on 6 June 2019.
c. A payment of $16,000, recorded as advertising expense, is for advertisements for four
months commencing 1 April 2019.
d. A customer has paid a deposit of $2,500 for goods to be delivered on 2 June 2019. The
bookkeeper recorded it in the sales account.
e. An invoice to a credit customer for sales of $2,000 was recorded wrongly as $2,200.
f. A cabinet which costs $1,400 was recorded wrongly into the office equipment account.
g. Norman bought a laptop for the business at $3,100, with his personal funds. This transaction
has been omitted from the accounts.
h. Cash drawings of $7,000 by Norman was still unrecorded at year-end.
i. Annual depreciation on fixed assets is to be recorded as follows:
Furniture & fittings - $7,345
Office equipment - $12,689
Required:
(a) Show journal entries for adjustments (a) to (i). Narrations are not required.
(b) Prepare the following financial statements for Norman:
(i) Statement of Comprehensive Income for the year ended 31 May 2019;
(ii) Statement of Financial Position as at 31 May 2019.

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Topic 6
Inventory
6.9.1 Practice Activity: Inventory and Periodic System

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 1: Perpetual System
On 1 September 2019, Andrew Inc has 420 units of inventory that cost $5 each. The
transactions for September as provided below:

Unit Selling
Date Transaction Units Unit Cost
Price

8 Sep Purchase 180 $6

14 Sep Sale 310 $9

18 Sep Sale 250 $10

23 Sep Purchase 560 $8

28 Sep Sale 270 $11

The business uses the perpetual system for inventory costing.

Required:
Compute Andrew Inc’s ending inventory, cost of goods sold and gross profit for September
2019 using the (a) First-In-First-Out (FIFO), (b) Last-In-First-Out (LIFO) and (c) Weighted
Average Cost inventory costing methods.
Activity 2: Periodic System
Information as per Activity 1, but Andrew Inc uses periodic inventory system.
Required:
Compute Andrew Inc’s ending inventory, cost of goods sold and gross profit for September
2019 using the First-In-First-Out (FIFO), Last-In-First-Out (LIFO) and Weighted Average
Cost inventory costing methods.

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6.9.2 Practice Activity: Reporting Inventory
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 3: Reporting Inventory

Median Co is a seller of three products: A, B and C. The following is available at the

end of the current financial year:

Cost ($) Selling Price ($)

A 10,200 9,600

B 15,400 18,100

C 23,600 29,300

The business uses the perpetual system for inventory costing.

Commission of 8% on the selling price is payable to the company’s sales staff in order to make
the product sales.

Required:
Compute the total value of inventory to be reported in Median Co’s financial statements?
[Round off your answers to the nearest whole number if necessary.]

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Topic 7
Current Assets: Receivables
7.5 Practice Activity: Account for Allowance for Uncollectible
Receivables
Time: 20 minutes
Purpose: To understand accounting treatment of allowance for uncollectible
receivables
Task: Read the instructions and solve the questions to submit to your facilitator
on a pdf
Feedback: Your facilitator will moderate the submission

Question 2
The following has been extracted from the records of Francis Trading as
at 30 September 2018:

$ $

Trade receivables 425,800

Allowance for receivables (33,700) 392,100

During the year ended 30 September 2019, Francis Trading made cash
sales of $1,720,500 and credit sales of $2,590,000. Despite its best
efforts, the business was unable to collect an overdue amount of $85,600
from its customers and wrote it off during the year. Francis Trading
received $2,030,600 from its credit customers and estimated that the
allowance for receivable should be set at 2% of outstanding trade
receivables.

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 Required:

1. Record the journal entries to record the above transactions that relate to trade
receivables.

1. With respect to trade receivables, prepare the following for the year ended 30
September 2019 for Francis Trading:

 An extract of Income Statement for the year ended 30 September 2019.

 An extract of the Statement of Financial Position as at 30 September 2019.

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7.5.3 Practice Activity: Receivable – To be submitted in canvas
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 3
The opening balances of the accounts receivable and allowance for receivables accounts as at
1 January 2024 were $60,000 and $5,400 respectively.
As at 31 Dec 2024, total sales of $680,000 including cash sales of $260,000 were made. A
payment of $306,000 was received from credit customers and irrecoverable debts of $23,300
was written off for the year.
The allowance for receivables at year end has been set at 5% of outstanding receivables
balance.

1. Record the journal entries to record the above transactions. Narrations are not required.
2. Prepare an extract of the Statement of Comprehensive Income for the year ended 31
December 2024 with the charges for irrecoverable debts.
3. Prepare an extract of the Statement of Financial Position as at 31 December 2024 with
regards to accounts receivables.

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7.5.3 Practice Activity: Receivable – To be submitted in canvas
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 4

The opening balances of the accounts receivable and allowance for receivables
accounts as at 1 January 2023 were $84,000 and $6,700 respectively.
As at 31 Dec 2023, total sales amounted to $760,000, with cash sales of $160,000
included. Credit customers made a payment of $210,000 in total and there were
irrecoverable debts of $19,100 written off for the year.
If the allowance for receivables as at 31 December 2023 has been set at 2% of
outstanding receivables balance.

1. Record the journal entries to record the above transactions. Narrations are
not required.
2. Prepare an extract of the Statement of Comprehensive Income for the year
ended 31 December 2023 with the charges for irrecoverable debts.
3. Prepare an extract of the Statement of Financial Position as at 31 December
2023 with regards to accounts receivables.

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7.5.3 Practice Activity: Receivable – To be submitted in canvas
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 5

The opening balances of the accounts receivable and allowance for receivables
accounts as at 1 January 2024 of Shelly Ltd were $120,000 and $6,900
respectively.
As at 31 Dec 2024, total sales of $750,000 including cash sales of $320,000 were
made. A payment of $286,000 was received from credit customers and
irrecoverable debts of $20,900 was written off for the year.
If the allowance for receivables as at 31 December 2024 has been set at 5% of
outstanding receivables balance.

1. Record the journal entries to record the above transactions. Narrations are
not required.
2. Prepare an extract of the Statement of Comprehensive Income for the year
ended 31 December 2024 with the charges for irrecoverable debts.
3. Prepare an extract of the Statement of Financial Position as at 31 December
2024 with regards to accounts receivables.

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Topic 8
Non-Current Assets
8.7.1 Practice Activity: Non-current Assets
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 1
Virgil Inc acquired a piece of freehold land for $1.8 million, paying $800,000 in cash and
financing the remaining amount with a bank loan. Legal fees of $25,600 and inspection costs
of $14,200 were also paid to get the land ready for use. The business commenced work to
construct an office building on the land and has paid an architect $75,300 to design building.
$490,500 was also paid to a main contractor for construction services.

Required:
1. Determine the following costs to be reported on the Statement of Financial Position for (i)
Freehold land and (ii) Office building.

Activity 2
1. State whether each of the following items should be accounted for as capital expenditure or
revenue expenditure:

Capital or Revenue
Item
Expenditure

i) Annual servicing fee of $8,900

ii) Installation costs of $7,500 for fixtures

iii) Major overhaul of delivery van: $12,500

iv) Insurance premium for one year: $3,200

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Activity 3
On 1 January 2016, a business acquired a motor vehicle for $42,000. It has a useful life of 4
years and an estimated residual value of $6,000. The financial year for the business ends on 31
December each year. Compute depreciation for the business using (i) straight-line and (ii)
reducing balance methods – 40%

Activity 4
Information as per Activity 3 except that equipment is acquired on 1 April 2016.

Required:
Compute depreciation for the business using (i) straight-line for year 2016 to 2020 and (ii)
reducing balance method for year 2016 to 2019.

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8.7.2 Practice Activity: Non-current Assets - To be submitted in
canvas
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 2
The following information was extracted from the statement of financial position of Grand Co.
on 1 May 2023:

Plant and Machinery Cost 990,000

Accumulated depreciation 110,000

Motor vehicles Cost 480,600

Accumulated depreciation 94,200

As at 30 April 2024, the company has yet to account for the following transactions: It is the
company’s policy to depreciate the motor vehicles using the straight-line method. The motor
vehicles have a useful life of 10 years and a scrap value of $90,000.
Grand Co. depreciates the plant and machinery at the rate of 20% on the reducing balance
method. A new machine was bought on 1 May 2023. The machine cost $120,000, with
additional $20,000 paid for transportation and $5,000 for testing and $10,000 for installation.
A one-year maintenance contract was also taken out at a cost of $8,000.
Required:
1. Calculate the depreciation charge for motor vehicles for the year ended 30 April 2024.
2. Calculate the depreciation charge for plant and machinery for the year ended 30 April
2024.
3. Prepare an extract of the Statement of Comprehensive Income for the year ended 30
April 2024, showing items relating to non-current assets.
4. Prepare an extract of the Statement of Financial Position as at 30 April 2024, with
respect to the fixed assets mentioned above.

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8.7.3 Practice Activity: Non-current Assets – To be submitted in
Canvas
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 2
The following information was extracted from the statement of financial position of Quik Co.
on 1 July 2023:

Motor vehicles Cost 970,000

Accumulated depreciation 102,000

Equipment Cost 490,600

Accumulated depreciation 84,900

As at 30 June 2024, the company has yet to account for the following transactions:
It is the company’s policy to depreciate the motor vehicles using the straight-line method. The
motor vehicles have a useful life of 8 years and a scrap value of $50,000.
Quik Co. depreciates the equipment at the rate of 20% on the reducing balance [Link]
A new equipment was bought on 1 July 2023. The equipment cost $110,000, with additional
$10,000 paid for delivery and $8,000 for installation. An insurance contract was also taken out
at a cost of $7,000 per year.
Required:
1. Calculate the depreciation charge for motor vehicles for the year ended 30 June 2024.
2. Calculate the depreciation charge for the equipment for the year ended 30 June 2024.
3. Prepare an extract of the Statement of Comprehensive Income for the year ended 30
June 2024, showing items relating to non-current assets.
4. Prepare an extract of the Statement of Financial Position as at 30 June 2024, with
respect to the fixed assets mentioned above.

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8.7.4 Practice Activity: Non-current Assets - To be submitted in
Canvas
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 2
The following information was extracted from the statement of financial position of Heidi
Co. on 1 September 2023:

Building Cost 800,000

Accumulated depreciation 120,000

Vehicles Cost 340,600

Accumulated depreciation 84,200

As at 31 August 2024, the company has yet to account for the following transactions:

It is the company’s policy to depreciate the buildings using the straight-line method. The
buildings have a useful life of 10 years and a scrap value of $50,000.
Heidi Co. depreciates the vehicles at the rate of 20% on the reducing balance method. Heidi
Co. bought a new van on 1 September 2023. The van cost $90,000, with additional $10,000
paid for delivery and $6,000 for testing. A one-year insurance contract was also taken out at a
cost of $4,000.

Required:
1. Calculate the depreciation charge for buildings for the year ended 31 August 2024.
2. Calculate the depreciation charge for vehicles for the year ended 31 August 2024.
3. Prepare an extract of the Statement of Comprehensive Income for the year ended 31
August 2024, showing items relating to non-current assets.
4. Prepare an extract of the Statement of Financial Position as at 31 August 2024, with
respect to the fixed assets mentioned above.

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Topic 9

9.8.1 Practice Activity: Liabilities and Shareholder’s Equity

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 1
The following trial balance has been extracted from the books of Docks Ltd as at
30 June 2019:
Dr ($) Cr ($)

Sales 1,240,500

Inventory, 30 Jun 2018 93,400

Administrative expenses 28,700

Wages and salaries 185,600

Utilities 37,300

Advertising 19,200

Bank 27,900

Purchases 742,800

Irrecoverable debts 5,600

Allowance for receivables, 30 Jun 2018 2,700

Trade payables 77,100

Share capital (600,000 shares) 300,000

Buildings, at cost 560,200

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Accumulated depreciation: Building, 30 Jun
97,500
2018

Machinery, at cost 250,600

Accumulated depreciation: Machinery, 30 Jun

82,300
2018

Trade receivables 88,500

Retained earnings, 30 Jun 2018 239,700

2,039,800 2,039,800

Additional information:
I. Inventory at 30 June 2019 amounted to $86,200.
II. Utility bills that are unpaid as at year-end amounted to $2,900.
III. Advertising expenses included $1,800 paid for advertising to be run in
August 2019.
IV. At the end of the financial year, Docks Ltd is of the opinion that the
allowance for receivables should be increased to $3,600.
V. $20,000 of dividends were paid in 2019 but omitted in the accounts of
Docks Ltd.
VI. Depreciation is to be charged on buildings at 5% per annum on cost and
machinery at the rate of 10% per annum on net book value.

Required:

(a). Prepare adjusting entries for items (ii) to (vi) above.

(b). Prepare the following financial statements using the worksheets provided:
(i). Statement of Comprehensive Income for the year ended 30 June 2019.
(ii). Statement of Changes in Equity for the year ended 30 June 2019.
(iii). Statement of Financial Position as at 30 June 2019.

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9.8.3 Practice Activity: Liabilities and Shareholder’s Equity – To be
submitted in Canvas

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 3
Bingo Ltd. Co. deals in dog food. The following is the unadjusted Trial Balance of Bingo Ltd.
Co. as at 31 July 2024:

Dr Cr

Land 858,000

Plant & machinery 400,000

Accumulated epreciation - Plant & machinery 195,900

Office equipment 150,600

Accumulated depreciation - Office equipment 88,950

Ordinary share capital @ $2.00 each 800,000

Retained profits b/f 355,150

6% debentures (due in 5 years) 100,000

Net Profit (before adjustment) 350,900

Trade receivables 330,000

Cash at bank 280,000

Trade payables 271,900

Allowance for receivables 18,000

Inventory 161,600

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Additional information:
I. Dividends paid amounting to $18,000 are to be recorded in the accounts.
II. Trade receivables of $21,000 for a bankrupt customer is to be written off.
III. The 6% debentures were issued on 1 March 2024. The interest is to be accrued
as at year end.
IV. It is the company’s policy to depreciate plant and machinery at 10% per annum
using the straight-line method and office equipment at 20% per annum using
the reducing balance method.
Required:

(a). Prepare journal entries based on the above information. Ignore narration.
(b). Calculate the net profit after adjustment for the year ended 31 July 2024. Show all your
workings clearly.
(c). Prepare an extrat of the Statement of Financial Position as at 31 July 2024 showing the
Shareholders' Equity section only.

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9.8.4 Practice Activity: Liabilities and Shareholder’s Equity – To be
submitted in canvas
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.
Activity 3
Josh Pte. Ltd. Co. deals in musical instruments. The following is the unadjusted Trial Balance
of Josh Pte. Ltd. Co. as at 30 June 2024:

Dr Cr

Cash at Bank 146,700

Property 2,500,000

Plant & machinery 495,000

Accumulated epreciation - Plant & machinery 340,000

Delivery Vehicle 380,650

Accumulated depreciation - Delivery Vehicle 193,640

Net Profit (before adjustment) 480,000

6% debentures (due in 5 years) 250,000

Ordinary share capital @ $2.00 each 1,800,000

Retained profits b/f 730,400

Trade receivables 300,000

Allowance for receivables 10,100

Trade payables 206,540

Inventory 188,330

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Additional information:
I. Trade receivables of $37,000 for a bankrupt customer is to be written off as at 30 June
2024.
II. Dividends declared and paid amounting to $25,000 are to be recorded in the
accounts.
III. The 6% debentures were issued on 1 March 2024. The interest is to be accrued as at
year end.
IV. It is the company’s policy to depreciate plant and machinery at 10% per annum on
cost and delivery vehicle at 20% per annum on net book value.

Required:

(a). Prepare journal entries based on the above information. Ignore narration.

(b). Calculate the net profit after adjustment for the year ended 30 June 2024. Show all your
workings clearly.
(c). Prepare an extrat of the Statement of Financial Position as at 30 June 2024 showing the
Shareholders' Equity section only.

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Topic 10
Statement of Cash Flow
10.7.1 Practice Activity: Statement of Cash Flow

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Classify the following cash flows as inflows/outflows in Operating, Investing or Financing

activities:

Activity Inflow/(Outflow)

1. Payment for goods bought on credit

2. Proceeds from issuance of bonds

3. Receipts from disposal of equipment

4. Repayment of bank loan

5. Cash received from customers

6. Distribution of dividends

7. Payment for purchase of vehicle

8. Proceeds from share issuance

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10.7.3 Practice Activity: Cash Flow Statement

Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

The statement of financial position for Coates Ltd as at 30 June 2019 is provided
below together with comparative figures for the previous year.

Coates Ltd
Statement of Financial Position as at 30 June
Feb 2019
2019 2018

$’000 $’000 $’000 $’000

Non-current Assets

Fixed assets, at cost 3,200 2,900

(less): Accumulated
(1,740) (1,130)
depreciation

1,460 1,770

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Current Assets

Inventory 740 625

Trade receivables 375 492

Bank 52 36

1,167 1,153

Total assets 2,627 2,923

Share capital and reserves

Ordinary share capital 1,240 1,140

Retained earnings 344 298

1,584 1,438

Non-current Liabilities

8% Loan notes 600 1,100

Current Liabilities

Trade payables 433 385

Total equity and liabilities 2,627 2,923

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Additional information for the year ended 30 June 2019:
1. Tax expense for the year is $25,000. The same amount has been paid during
the financial year.

2. The increase in the retained earnings account is made up of:

$’000 $’000

Openign balance 298

Profit after tax 173

Dividends paid (127)

Retained profit
46
for the year

Ending balance 344

3. Non-current assets that had cost $320,000 and with net book value of $240,000
were sold for $170,000 during the year.
4. Depreciation is $690,000.

Required:
Prepare a Statement of Cash Flows for Coates Ltd for the year ended 30 June
2019.

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10.9.1 Practice Activity
1. Questions:
1. The Cash Flow Statement has 3 Categories of Activities. Name the three categories.
2. The Cash Flow Statement has 3 Categories of Activities. Give 2 (TWO) examples of the
Financing Activities Category.
3. List down 2 (TWO) benefits of the cash flow statement when used in conjunction with
other financial statements.

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Topic 11
Financial Statement Analysis
11.5.1 Practice Activity: Financial Statement Analysis
Time: 30 minutes
Purpose: To identify the accounting equations
Task: Attempt the practice and submit your answers in a word document.
Feedback: Your facilitator will provide feedback on your submission.

Activity 1
Tech-Line Ltd
Statement of Comprehensive Income for the year ended 31 December

20X8 20X7
$'000 $'000
Sales 4,520 2,890
Cost of goods sold (2,570) (1,670)
Gross profit 1,950 1,220
Operating expenses (620) (410)
Operating income 1,330 810
Interest expense (50) (20)

Profit before tax 1,280 790

Income tax expense (60) (40)
Profit after tax 1,220 750

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Statement of Financial Position as at 31 December

20X8 20X7
$'000 $'000 $'000 $'000
Non-current Assets

Fixed assets, net 2,396 1,376

Current Assets
Inventory 585 247
Trade receivables 408 243
Other receivables and prepayments 215 62
Cash 106 114
1,314 666
3,710 2,.042
Current Liabilities
Trade payables 526 315
Other payables 104 97
630 412

Non-current Liabilities
10% Loan notes 400 200
Shareholders' Equity
Ordinary share capital 400 350
Retained earnings 2,280 1,060
2,680 1,410
3,710 2,042

Required: Compute ratios to analyse Tech-Line Ltd's profitability and solvency

for 20X8 as compared

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