LAMS

1.

2.
3.
Class discussion
Seminar 1

I don’t understand what is the gain and loss options, is it the decrease or the increase in each of the
classification?

 Gain or loss is similar to revenue and expense in income statement except the difference in
the nature of transactions. That is, Gains/Losses arise from activities that are not part of
typical, routine, day-to-day operations and are not transactions with owners. If an activity is
unusual or infrequent, typical the resulting transaction is considered a gain or loss.

1. Liabilities (Correct)
2. Assets (Correct)
3. Assets (Correct)
4. Assets (Correct)
5. Assets (Incorrect)  Expense (see the income statement)

6. Its in both revenue and expense (Incorrect)  Try again by searching through the Singapore
Airlines’ annual report.  Assets
7. Assets (Incorrect)  Try again by searching through the Singapore Airlines’ annual report. 
Liabilties
8. Decrease in Asset (Trade debtors are asset; however, I am not sure how you got “decrease in
asset.” Note that “Trade debtors = Accounts Receivable = Trade receivables”)
9. Assets (Correct)
10. Liabilities (Correct)
11. Assets (Correct)
12. Assets (Correct) classify as subsidiary companies if the firm’s ownership is greater than 50%.
For example, Singapore Airline owns the 100% shares of Scoot airline.
13. Revenue (Incorrect) Revenue and gain is different. Please read the explanation on the top.
Gain
14. Revenue (Incorrect)  Try again. Gain
15. Increase Shareholder’s Equity  I assume this is going to revaluation reserve. (impairment of
impairment of PPE) (Incorrect)  Impairment is an expense.
16. Assets (Correct)
17. Assets (Correct)
18. Expense (Correct)
19. Assets (Correct) classify as associated companies if the firm’s ownership is greater than 20%
but less than 50%
20. Expense (Correct)
21. Assets (Correct)
22. Expense (Correct)
23. Reduce Equity (Correct) (Stockholder’ Equity) (SE): note that I purposely put the parenthesis
to indicate it would reduce stockholders’ equity. This account is called Contra Equity account.
“Contra” means “against.” For your reference, repurchased stock is called treasury stock
24. Expense (Correct)
25. Equity (Correct)  Share capital = Contributed capital = Common Stock
26. Liabilities (Correct)
27. Revenue (Correct)
28. Equity (Correct)  General Reserve = Unappropriated profit = Retained earnings
29. Liabilities (Correct)
30. Liabilities (Correct)
31. Equity (Correct)  For your reference (it will be covered in later class), non-controlling
interests (NCI, used to be called “minority interest) is the amount of equity investment made
by outside shareholders to consolidated subsidiaries that are not 100% owned by the parent
but less than 50% owned
SMRT

i. (Correct)

Asset = Liabilities + Equity

2,720,022 = +
1,805,775 914,247
ii. (Correct)

Vision: Moving People, Enhancing Lives (from FY2016 FS)

to be the people’s choice by delivering a world-class transport service and lifestyle
Mission:
experience that is safe, reliable and customer-centric (from the FY2016 FS)
iii. (Correct)

2016 2015
108,275 90,454 Increase
iv. (Correct)

Dividend/share
$2.50 Note 28

Decrease Asset and Equity, no change to liabilities

Cash (↓ by $38,096,297) and Accumulated Profits (↓ by $38,096,297)

v. (Correct)

a Account affected Account affected

Debit: Loans Credit: Cash
Transaction details: Loan repayment

b Account affected Account affected

Debit: Cash Credit: Loans
Transaction details: Issue of unsecured notes

c Account affected Account affected

Debit: Inventories Credit: Cash
Transaction details: Inventory purchases or
Purchase & disposal of property, plant and
equipment or cash received from trade
receivables or prepayments

d Account affected Account affected

Debit:
Receivables Credit: revenue
Transaction details: Sales of flights

e Account affected Account affected

Debit: PPE Credit: Revaluation Reserve
Transaction details: Upwards Revaluation of PPE
Or
Proceeds from issue of shares
 vi. (Correct)

Audited:
Yes By: PWC
Provide reasonable assurance to stakeholders of the company
Value of that the financial statement is free from material
Audited misstatements. The Audit opinion concludes the audit's view
Financial of SMRT FS, that is it is a true and fair view of the financial
Statements position of the Group and Company as of year end
Seminar 2

Normal
Accounts Balance
Debit
1 (Correct)
Debit
2 (Correct)
Credit
3 (Correct)
Debit
4 (Correct)
Debit
5 (Correct)
Credit
6 (Correct)
Debit
7 (Correct)
Credit
8 (Correct)
Debit
9 (Correct)
Debit
10 (Correct)
Credit
11 (Correct)
Debit
12 (Correct)
Credit
13 (Correct)
Debit
(Incorrect
– see the
14 below)
Debit
15 (Correct)
Credit
16 (Correct)
Credit
17 (Correct)
Debit
18 (Correct)
Debit
19 (Correct)
Credit
20 (Correct)

For Q1-14:

Under Trade and other payables (p. 217)

Liability (like Unearned Revenue)  CREDIT

See below for Questions 2 and 3:

03-May Dr Accounts Payable 3,000

Cr Cash 3,000

04-May Dr Inventory 5,000

Cr Cash 5,000

06-May Dr Cash 2,450

Cr Accounts Receivable 2,450

07-May Dr Cash 3,000

Dr Accounts Receivable 2,000
Cr Revenue 5,000

Dr COGS 3,850
Cr Inventory 3,850
 08-May Dr Cash 4,000
Dr Accounts Receivable 2,500
Cr Land 6,500

15-May Dr Notes Payable 2,500

Cr Cash 2,500

21-May Dr Cash 1,000

Cr Capital Stock 1,000

23-May Dr Cash 3,750

Cr Revenue 3,750

Dr COGS 2,000
Cr Inventory 2,000

25-May Dr COGS 1,000

Cr Cash 1,000

26-May Dr Rental Expense 250

Cr Cash 250

29-May Dr Furniture 250

Cr Cash 250

Debit Credit
Cash 7,250 -
Accounts Receivable 4,500 -
Inventory 7,150 -
Land 6,500 -
Building 12,000 -
Furniture 2,250 -
Notes Payable - 10,000
Accounts Payable - 3,000
Capital Stock - 16,000
Retained Earnings - 9,000
Revenue - 8,750
COGS 6,850 -
Rental Expense 250 -
46,750 46,750
 Debit Credit
Cash 19,000 -
Mortgage Payable - 75,200
Advertising Expense 9,600 -
Capital Stock - 110,000
Equipment 36,900 -
Notes Payable - 197,350
Inventory 142,000 -
Wages Expense 87,900 -
Notes Receivable 12,000 -
Accounts Payables - 23,450
Accounts Receivable 5,300 -
Rent Expense 8,750 -
Wages Payable - 12,000
Furniture 18,000 -
Other Expense 1,950 -
Sales Revenue - 225,600
Buildings 110,700 -
COGS 113,650 -
Property Tax Expense 1,300 -
Land 95,850 -
Retained Earnings - 21,400
Utilities Expense 2,100 -
665,000 665,000
Seminar 3
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