Secondary : Four Topic : Accounting Equation & Balance Sheet by : Miss Law Wai Chun.

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Secondary : Four Topic : Accounting Equation & Balance Sheet by : Miss Law Wai Chun

Unit 1: Case study of Ann’s financial position: Accounting equation Table of Content Unit 4: Balance Sheet of Some Companies & Use of Educational courseware Unit 2: Case study of Doraemon’s Ice-Cream Shop: Change in accounting equation Unit 3: Classwork

Ann

Ann has four items of belongings: Watch \$800 Computer \$13,000 acer: Ann’s total assets ( 資產 ) = Model \$1,000 Saving account Cash at bank \$2,000 \$16,800

Ann’s assets ( 資產 ) \$ Watch 800 Computer 13,000 Model 1,000 Cash at bank2,000 16,800 ==== Asset’s sources of finance \$10,000 Loan ( 貸款 ) from Co. \$300 Borrowing from uncle \$10,300 Liabilities ( 負債 ) How much actually owned by Ann ? + \$6,500 Ann’s Capital ( 資本 )

Assets \$ Capital & Liabilities \$ Watch 800 Capital 6,500 Computer 13,000 Loan from Co. 10,000 Model 1,000 Borrowing from uncle 300 Bank 2,000_______ 16,800 16,800 =========== Ann’s Balance Sheet

What is accounting equation, Snoopy ? Hay…it is Assets = Liabilities + Capital

It is a right time to start my own ice-cream business!!

I open a saving account for the shop and deposit \$150,000 as investment ( 投資 ) Assets = Liabilities + Capital Bank \$150,000 = 0 + \$150,000

What assets should I buy ? Stock ( 存貨 ) Electrical appliances ( 電 器 ) Office equipment ( 辦公儀器 )

Transaction:Purchase of electrical appliances amounting to \$10,000 by cheque.  Bank 140,000 = 0 + \$150,000  Electrical appliances \$10,000 \$150,000 Assets = Liabilities + Capital

Transaction:Purchase of stock at \$12,000 by cheque.  Bank \$128,000 = 0 + \$150,000 Electrical appliances \$10,000  Stock \$12,000 \$150,000 Assets = Liabilities + Capital

Transaction:Purchase of office equipment at \$9,000 financed by a loan. Bank \$128,000 =  Loan \$9000 + 150,000 Electrical appliances \$10,000 Stock \$12,000  Office Equipment \$9,000 \$159,000 Assets = Liabilities + Capital

Transaction: Repaid ( 償還 ) \$5,000 loan by cheque.  Bank \$123,000 =  Loan \$4,000 + 150,000 Electrical appliances \$10,000 Stock \$12,000 Office Equipment \$9,000 \$154,000 Assets = Liabilities + Capital

Doraemon’s Ice-Cream Shop Balance sheet as at 31 Dec 2000 Assets \$ Capital & Liabilities \$ Electrical appliances 10,000Capital 150,000 Office equipment 9,000 Loan 4,000 Stock 12,000 Bank 123,000_______ 154,000154,000======

 The effect of transactions on accounting equation is cumulative.  Each transaction affects at least two items in the accounting equation.  The accounting equation should be presented as a balance sheet.

Classwork 2.7X Complete the gaps in the following table: Assets Liabilities Capital \$ \$ \$ (a) 55,00016,900? (b) ?17,200 34,400 (c) 36,100 ? 28,500 (d) 119,50015,400 ? (e) 88,000 ? 62,000 (f) ? 49,000 110,000

Classwork 2.9X Which of the following are assets, and which are liabilities ? (a) Motor vehicles (b) Premises (c) Money owed for goods (d) Stock for goods (e) Debtors (f) Bank loan (g) Cash in hand (h) Loan from K. Lung (i) Machinery

Singapore airlines Hong Kong Ferry (Holding) Co. Ltd. Borrow Frank wood’s Principles of Accounts for Hong Kong Vol.1 (5th Ed.) CD-Rom in the library. Read the OHT P.2-3 as revision of this chapter and read the P.4 about the double entry system as the preparation for the next chapter. Choose one of the following companies and read the items in the corresponding balance sheet