CashBeginningCash collection Cash payment

Ending

Accunts receivable Allowance for account receivable impairmentBeginning

Sales on credit Cash collected Write off ARRestate AR Write off AR

Ending

Inventory WIPBeginning BeginningCOGM or COGS DMPurchased inventory Inventory write off DLReturn sales Applied MOHEnding Ending

Manangement accounting. Not used in financial accountingCost of purchased inventory

= Purchased price - Discount+ Freight (If FOB destination, no freight)+ Necessary other transportation fee+ Necessary installment fee+ Insurance for transportation (only for transportation)

Prepaid expense Interest ReceivableBeginning BeginningCash paid expense each period Interest received

Ending EndingFixed assets Acc. Depreciation of Fixed assets

Beginningcost of Purchased FA * Disposal FA Disposal FA

Ending*what should be include in cost of FA, refer to your lecture note.

Account payable Interest payableBeginning

Cash paid Purchase on credit Interest paid

Ending*Useful for finding interest/tax/dividend paid (indirect method for operating cash flow)

Unearned RevenueBeginning

Goods sold or Cash receivedService provided

Ending

Retained earningsBeginning

COGS Sales revenueSelling expense other revenue/gainAdmin expenseOther expenseDividend

Ending

Allowance for account receivable impairment Impairment of AR Beginning Beginning 0

Impairment of AR (expense)Restate AR

Ending Ending 0* Expense account, beginning and ending are 0

WIP MOHBeginning 0

COGM Actual expense Applied expense

Ending 0Manangement accounting. Not used in financial accounting

Interest Receivable

Interest revenue

Acc. Depreciation of Fixed assetsBeginningDprn expense

Ending

Interest payable Tax payable Dividend payableBeginning BeginningInterest expense tax paid tax expense Dividend paid

Allowance for account receivable impairment

Ending Ending*Useful for finding interest/tax/dividend paid (indirect method for operating cash flow)

Dividend payableBeginningDividend declared

Ending

PYP 2012-2013 S2 Question2 Case B For this kind of question, if you do not know how to start, just write down relevant double entries, and then T accounts.Then put relevant figures given by question in T accounts. Calculate what you want.

Estimate for impairment of AR expenseDr Impairment of AR expense Cr Allowance for impairment of ARWrite off impairment ARDr Allowance for impairment of AR When writing down double entries, we can see the answers are included in two T accounts: AR and Allowance for AR impairment Cr AR

Allowance for impairment of Account receivable Since all other three figures are given by question, we can easily find written off ARBeginning $ 20,000 Given by question

a) Writen-off AR 12,000 Impairment of AR 5,000 Given by question

Ending $ 13,000 Given by question

Ending= Beginning + Credit total - Debt total in T account, this relationship is very important. Be sure to know it.b) Account receivable We can find cash collected. Since all other four are known.Given by question Beginning $ 558,000

Sales on credit 5,710,000 Cash collected 5,711,000 Given by question. All sales are on account. So we can get the figure for sales on credit directly.Write off AR 12,000 Got from (a) section

Given by question Ending $ 545,000 Ending=Beginning+Debt total- Credit total

For this kind of question, if you do not know how to start, just write down relevant double entries, and then T accounts.Then put relevant figures given by question in T accounts. Calculate what you want.

When writing down double entries, we can see the answers are included in two T accounts: AR and Allowance for AR impairment

Since all other three figures are given by question, we can easily find written off AR

in T account, this relationship is very important. Be sure to know it.We can find cash collected. Since all other four are known.

Given by question. All sales are on account. So we can get the figure for sales on credit directly.

PYP 2012-2013 S2 Question2 Case CHow to find figures in T account is very important!!!!!!!

Pre-tax loss $ -2,000.00 !! Pre-tax income or loss, not net income or loss tax payableDepn expense $ 5,000.00 Non cash expense Add Increase in AR $ -2,000.00 Increase in assets Deduct Tax paidDecrease in Inventory $ 4,000.00 Decrease in assets Add Shortcut.Decrease in Prepaid expense $ 2,000.00 Decrease in assets Add Increase in AP $ 6,000.00 Increase in liability Add Tax paid= Beginning + Tax expense -EndingTax paid $ -2,000.00 Separate disclosure under FRS 7 Deduct = Tax expense-(Ending-Beginning)Interest expense $ 2,000.00 Separate disclosure under FRS 7 Add = Tax expense - Increase in Tax payable or Tax expense + Decrease in TaxpayableInterest paid $ -1,000.00 Separate disclosure under FRS 7 Deduct Here= 0+2000

Net cash flow $ 12,000.00 = 2000

Interest payable

Interest paid

Interest paid= Beginning + Interest expense -EndingFor detailed explanation for indirect method for operating cash flow = Interest expense-(Ending-Beginning)Pls refer to my review notes for seminar 1 to 7 = Interest expense - Increase in Interest payable or Interest expense + Decrease in Interest payable

Here= 2000-1000= 1000

Beyond this two, you should also know how to find tax/interest/dividend received.

Why include both interest expense and interest paid here?

Hint: What we adjust is the difference between net cash flow and pre-tax income. Pls think over it yourself.You can refer to your lecture note

How to find figures in T account is very important!!!!!!!tax payable

BeginningTax expense 0

EndingBeginning + Tax expense -EndingTax expense-(Ending-Beginning)Tax expense - Increase in Tax payable or Tax expense + Decrease in Taxpayable

Interest payableBeginningInterest expense 2000

EndingBeginning + Interest expense -EndingInterest expense-(Ending-Beginning)Interest expense - Increase in Interest payable or Interest expense + Decrease in Interest payable2000-1000

Beyond this two, you should also know how to find tax/interest/dividend received.