1. Tutorials Amsterdam Business School
Accounting P 6011P0148 / PE 6011P0150
Tutorials Amsterdam Business School

2. Slides online katalinbuzasi.weebly.com Page: Accounting (for students)
Password: ABS2016
Accounting week 45

3. Where are we? Last week Working with financial statements
Understanding the relation between financial stetements
Today (the aim of T2)
Start to work with accounts
Understanding the logical structure of accounts
Going into deep
Current assets
Noncurrent assets
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4. Contents Today CH4: P4.21, P4.26 CH5: P5.29, P5.33 CH6:E6.18, P6.28
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5. The logic of financial accounts
Each line in the balance sheet and income statement has an account where we register the changes (increase and decreas) related to that line
Main account types (how do they work?, what is their relationship with financial statements?)
Asset accounts
Liabilities accounts
Owners equity accounts
Revenue accounts
Expense accounts
Other account types
Contra accounts
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6. The structure of accounts
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7. P4.21 (page )
The aim is to practice how to use accounts to register simple economic events
Understand the logic of accounts based on real examples
Practicing the journal entry method
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8. P4.21 (page )
A.) Issued 100,000 shares of $5 par value common stock for $500,000 in cash.
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9. B.) borrowed $250,000 from Oglesby National Bank and signed 12% note due in three years.
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10. C.) Incurred and paid $190,000 in salaries for the year.
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11. D.) Purchased $320,000 of merchandise inventory on account during the year.
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12. E.) Sold inventory costing $290,000 for a total of $455,000, all on credit.
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13. F.) Paid rent of $55,000 on the sales facilities during the first 11 month of the year.
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18. P5.29 (page 176) Practicing how to register bad debt
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19. Simple example for bad debts
1st May 2015-The company sells inventory of $60,000 for $100,000 on account
The company expects that 5% of the sales will not be collectable
6th August 2015-It turns out that 3% of the sales on 1st May is really uncollectible
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22. P5.33 (page 178) – evaluating/costing inventories
Inventory records: FIFO and LIFO method with periodic and perpetual system
Periodic: costs of goods sold are calculated at the end of the period
Perpetual: costs of goods sold are calculated when sales are made
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23. Information on inventory
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24. Tasks
Calculate the value of costs of goods sold and the ending inventory under the periodic system with FIFO methods
Calculate the value of costs of goods sold and the ending inventory under the periodic system with LIFO methods
Calculate the value of costs of goods sold and the ending inventory under the perpetual system with FIFO methods
Calculate the value of costs of goods sold and the ending inventory under the perpetual system with LIFO methods
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31. E 6.18 – goodwill Practice example (Book, page 200)
A company bought another company for $1,000,000 cash and assuming a note payable liability of $100,000. The bought company had equipment of $200,000, inventory of $250,000 and the notes payable of $100,000. Record the changes in the buying company’s accounts.
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32. Solution Dr. Inventory 250,000 Dr. Equipment 200,000
Cr. Cash ,000,000
Cr. Notes payable ,000
Dr. Goodwill ,000
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33. E 6.18
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34. P6.26 (page 222) How to record depreciation?
Understanding the methods of depreciation
Straight-line
Accelerated
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35. Information on equipment
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