Nanyang Technological University

BU8101 Accounting: A User Perspective

Semester 1, 2011/2012

Seminar 1 (for week commencing 15 August 2011)

Activity 1
Ice breaking session and briefing on group presentation and participation

The following will be done/discussed:

1. Formation of groups;
2. The evaluation criteria that your Tutor is applying in your tutorials;
3. The Tutors expectations of you;
4. Your expectations of the course and the assistance you may require for the course;
5. Any clarifications on the course assessment criteria.

Activity 2

Prior to doing the seminar questions, please review Demonstration Problems on

page 62 to 63 of main text.

Seminar Questions

1. H. George started The George Co., a new business that began operations on May 1.
George Co. completed the following transactions during that first month:

May 1 H. George invested $40,000 cash in the business in exchange for common stock.
1 Rented a furnished office and paid $2,200 cash for Mays rent.
3 Purchase $1,890 of office equipment on credit.
5 Paid $750 cash for this months cleaning services.
8 Provided consulting services for a client and immediately collected $5,400 cash.
12 Provided $2,500 of consulting services for a client on credit.
15 Paid $750 for an assistants salary for the first half of this month.
20 Received $2,500 cash payment for the services provided on May 12.
26 Paid $1,890 cash for the office equipment purchased on May 3.
27 Purchased $80 of advertising in this months (May) local paper on credit; cash
payment is due June 1.
28 Paid $750 cash for an assistants salary for the second half of this month.
30 Paid $300 cash for this months telephone bill.
30 Paid $280 cash for this months utilities.
31 Paid $1,400 cash for dividends.

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Required:
a. Arrange the following asset, liability and equity titles in a table as follows:

Assets Liabilities Equity

Off. Common
Date Cash + AR + Equipt = AP + Stock + Revenues - Expenses - Dividends
1/5 +40,000 +40,000

b. Show effects of the transactions on the accounts of the accounting equation by

recording increases and decreases in the appropriate columns as shown above for
transaction on May 1. Do not determine new account balances after each transaction.
Determine the final total for each account and verify that the equation is in balance.

c. Prepare an income statement, balance sheet and statement of cash flows for the month
of May. (Use format as shown in Exhibit 2-10, 2-12 and 12-13 of your text)

2. Case 2.5 (page 81)

Self-Practice Problems

3. The following self-practice problems are from the main text.

(a) Students who have bought the 16th edition text will have access to Connect Plus by
registering in the following web link: http://connect.mcgraw-
hill.com/class/l_yin_kheng_seminar_practice.Thereafter, students can do the problems
(with guided solutions and reference) in the Connect Plus site.

(b) Students who do not want to buy the Connect Plus could solve the problems and then
check for key answers in the Check Figures file in the Course Documents folder in
the BU8101 Accounting Learning Centre 2011/2012 semester 1 site.

Seminar 1 Introduction to Accounting

Brief Exercise 2.3 to 2.5 and 2.7
Exercise 2.2, 2.11 and 2.13
Problems 2.4A and 2.6A

4. Do Self-Test Questions 1 to 8 on pages 63 to 64 of main text.

5. Using Financial Reports

Refer to the financial statements (income statement, balance sheet, statement of changes
in equity and cash flow statement and accompanying notes) of SingPost (a company
listed on the Singapore Exchange www.sgx.com ) for the year ended 31 March 2011.

a. Using the balance sheet, determine the amounts in the accounting equation: A = L +
OE for the Company for the current year. Ignore the Group
$1,039,010,000 = $742,411,000 + $296,599,000

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b. What is the net income or loss for the current year? What percentage of total revenue
was that net income or loss? Net income = $161,565,000 (28.55%)

c. How much dividends did the Company pay out to its shareholders during the year?
$120,339,000

e. Who are the Companys auditors? PricewaterhouseCoopers