LAB.

AKUNTANSI KEUANGAN MENENGAH I

Welcome to the class

A bit story about me.

PERSONAL Name : Novel Fernando Mobile phone : +6282112183960 E-mail : novel_smjtk@yahoo.com (preferred communication) FORMAL EDUCATION 2010 Master of Commerce (Advanced) major in Applied Finance at The University of Queensland, Australia 2006 Diploma IV at the College of State Accountancy (STAN) 2004 Diploma III at the College of State Accountancy (STAN) WORKING EXPERIENCE Securities Transaction and Institution Bureau, Capital Market and Financial Institutions Supervisory Agency (Bapepam dan LK), Ministry of Finance of the Republic Indonesia.

Administration

Assessment 1. Mid Exam 35% 2. Final Exam 35% 3. Progressive learning (quiz, participation in class, homework) 30% Text: 1. Kieso, Weygandt, Warfield, Intermediate Accounting, IFRS Edition, Vol 1 (main) th 2. Stice, Stice, Intermediate Accounting, 15 Ed 3. PSAK Course Outline and exercises/problems (provided by email)

Expectations and Responsibilities

Attend all lectures Read text book and material regarding Akuntansi Keuangan Menengah I. Lab Akuntansi Keuangan Menengah I only focuses on practical calculations. Its NOT discussing concept. Engage in the lecture!

We can grow into this but it is an important skill for graduate students My expectations of student participation in discussion during lectures will increase as the term progresses

Attempt all questions prior to the lectures Submit your homework, even I know some of you just copy from the solution or your friends work Ask if you dont understand. Never ask your friend as they dont understand either. Remember: There is no silly questions!

Some suggestions..

Read material from the textbook. Make this activity becomes your habits Attend and come prepared to all lectures You are better studying for 1 hour, 6 days a week than to study for 3 hours twice a week. You cant put off
studying. Progressive Learning is the Key Word! Active learning: Students must do more than just listen and copy the answer; They must read, write, discuss, or be engaged in solving problems.

The ultimate objective of the course

NOT a score But the knowledge and skill Understand the basic concept of financial statement Can prepare left side of balance sheet

Course Outline (Brief Overview)

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The Accounting Cycle Statement of Financial Position and Statement of Changes in equity Comprehensive Income Cash and Reconciliation of Cash Balance Accounts Receivables-I Accounts Receivables-II Financial Assets-I Financial Assets-II

Course Outline (contd.)

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Property, Plant and Equipment-I Property, Plant and Equipment-II Property, Plant and Equipment-III Investment Non-Current Assets Intangible Assets-I Intangible Assets-II Review

TOPIC 1
The Accounting Cycle

The Memory Calling: What is the Accounting Cycle?

1 SOURCE DOCUMENTS Transaction Analysis 2 3 JOURNALS LEDGERS During the accounting period

4 TRIAL BALANCE

ADJUSTING JOURNAL ENTRIES 6

7

ADJUSTED TRIAL BALANCE

FINANCIAL STATEMENTS 8 CLOSING JOURNALS

End of accounting period

9. POST-CLOSING TRIAL BALANCE (Optional) 10. Reversing Entries (Optional)

Q: Why do we need adjusting entries?

A: Timing of cash flow versus timing of revenue and expense recognition

Type of Adjusting Entries
Deferrals Accruals

Prepaid Expenses Unearned Revenues

Accrued Revenues Accrued Expenses

Exercises 1 Prepare adjusting entries to reflect the following transactions for XYZ Ltd as at 30 June 2011.
A B A Salary bonus due to the motel manager totalling $12,000 for the financial year has not yet been recorded . On 1 October 2010 a comprehensive insurance policy covering building and contents was taken out for the year ended 30 September 2011, the annual premium of $2,400 being paid on 1 November 2010. Interest on investments amounting to $450 is due but has not yet received. In may, commission of $360 had been received in advance for the six months ending 31 October 2011. The business has performed the required services for May and June. Accrued electricity charges were $92 and telephone charges were $102.

C D

Exercises 1 - Solution
Details A Salaries Expense Accrued Expenses Dr 12,000 12,000 Cr

(recognition of salaries owing at year end)

B Insurance Expense Prepayments (recognition of 9/12 x 2400 prepaid insurance expired)

1,800 1,800

C Interest Receivable

450

Interest Revenue
(recognition of interest earned but not received)

450

Exercises 1 - Solution
Details Dr Cr

D Unearned revenue
Commission revenue (recognition of commission earned2/6 x 360) E Electricity expense Telephone expense Accrued expenses (recognition of expenses incurred at end of period)

120
120

92 102 194

Exercises 2 Based on the following adjusted trial balance, prepare the required closing journal entries.
Accounts Cash at bank Accounts receivable Prepaid insurance DR 43,558 5,800 920 CR

Office supplies inventory

Land Building Accumulated depreciation - building Office Equipment Accumulated depreciation - office equipment Accounts payable Salaries payable Commissions payable
Interest payable

540
10,000 62,000 200 9,600 100 4,600 990 4,800
600

Accrued expenses Unearned appraisal fee Mortgage payable Share capital Retained earnings Commission revenue Appraisal fee revenue Service fee revenue Salary expense Commission expense Telephone expense Advertising Insurance Expense Office supplies expense Depreciation - office equipment Depreciation expense - building Interest expense Electricity expense 2,790 4,800 72 120 40 80 100 200 600 210 141,430

210 280 60,000 50,000 9,400 9,600 250 400

141,430

Exercises 2-Solution
Details Income Summary Salary expense Commission expense Telephone expense Dr 9,012 2,790 4,800 72 Cr

Advertising
Insurance expense Office supplies expense

120
40 80

Depreciation office furniture

Depreciation building

100
200

Interest expense
Electricity expense (transfer of expense a/c to Income summary)

600
210

Exercises 2-Solution
Details Commission revenue Appraisal fee revenue Service fee revenue Income Summary (transfer of revenue a/c to Income summary) Dr 9,600 250 400 10,250 Cr

Income Summary
Retained Earnings (transfer of Income summary to Retained earnings. Rev 10,250 Exp 9012

1,238
1,238

Exercise 3

From the trial balance provided in exercise 2, prepare the:

Income

Statement. Statement of Financial Position.

Income Statement
Smith Pty Ltd Income Statement for the period ended 30 June 2011 $ Sales Commission revenue Appraisal fee revenue Service fee revenue Less Operating Expenses Salary expense Commission expense Telephone expense Advertising Insurance Expense Office supplies expense Depreciation expense - office equipment Depreciation expense - building Interest expense Electricity expense Net Profit before tax $ 9,600 250 400 10,250 2,790 4,800 72 120 40 80 100 200 600 210

9,012 1,238

Smith Pty Ltd Statement of Financial Statement as at 30 June 2011 ASSETS $ $ Current Cash at bank 43,558 Accounts receivable 5,800 Prepaid insurance 920 Office supplies inventory 540 50,818 Non-Current Land 10,000 Building 62,000 Accum. Depr - building (200) Office Equipment 9,600 Accum. Dep - office equipment (100) 81,300 132,118 Total Assets LIABILITIES Current Accounts payable 4,600 Salaries payable 990 Commissions payable 4,800 Interest payable 600 Accrued expenses 210 Unearned appraisal fee 280 11,480 Non-Current Mortage payable 60,000 Total Liabilities Represented by Shareholders Equity Share Capital Retained earnings Total Shareholders Equity Total Liabilities and SE 71,480

50,000 10,638 60,638 132,118

Additional Exercises

E3-10 page 128 P3-6 page 135

FINISHED.

SEE YOU NEXT WEEK!