T1.Tutorials 1 Introduction To Fin STM

ENGG956 Financial Management for Engineered Assets
TUTORIAL 1 QUESTIONS
Introduction to Financial Management
QUESTION 1: Name the Following:
1. A resource controlled solely by an organization that is expected to provide future

benefits. _________________
2. Claims of creditors against an entity’s assets ________________
3. It represents the total amount of assets provided by owners to a business entity.

___________________________
4. All that a business owns and which has a life span of more than a year.
_______________________
5. Liabilities are categorized in two types:__________ and _________________
6. Advance payments received for goods and services that have not yet been
delivered. ________________
QUESTION 2
Financial information related to a Quality House as on 31 July & 31 August 2012 are given
below, Find the missing amounts:
31 July 2012 31 August 2012

Accounts Payable 90,000 100,000
Accounts Receivable 200,000 240,000
Capital (a) (b)
Cash 80,000 95,000
Inventory 20,000 15,000
QUESTION 3
(A) As of December 31, 2017, Kent Company has assets of $3,500 and owner’s equity of
$2,000. What are the liabilities for Kent Company as of December 31, 2017?
(a) $1,500. (c) $2,500.
(b) $1,000. (d) $2,000.
(B) Performing services on account will have the following effects on the components of
the basic accounting equation:
(a) increase assets and decrease owner’s equity.
(b) increase assets and increase owner’s equity.
(c) increase assets and increase liabilities.
(d) increase liabilities and increase owner’s equity.
Page 1 of 4
(C) During 2017, Bruske Company’s assets decreased $50,000 and its liabilities
decreased $50,000. Its owner’s equity therefore:
(a) increased $50,000. (c) decreased $100,000.
(b) decreased $50,000. (d) did not change.
QUESTION 4: Transaction Analysis

For each of the transactions given below describe the effect of each transaction on assets,
liabilities, and owner’s equity. For example, the first answer is: (1) Increase in assets and
increase in owner’s equity.
1. Made cash investment to start business.
2. Purchased equipment on account.
3. Paid salaries.
4. Billed customers for services performed.
5. Received cash from customers billed in (4).
6. Withdrew cash for owner’s personal use.
7. Incurred advertising expense on account.
8. Purchased additional equipment for cash.
9. Received cash from customers when service was performed.
QUESTION 5: Financial Statements

Listed below are some items found in the financial statements of Tony Gruber Co. Indicate
in which financial statement(s) the following items would appear:
1. Service revenue.
2. Equipment.
3. Advertising expense.
4. Accounts receivable.
5. Owner’s capital.
6. Salaries and wages payable.
Page 2 of 4
On the last day of the period, Alan Cesska Company buys a $900 machine on credit. This
transaction will affect the:
(a) income statement only.
(b) balance sheet only.
(c) income statement and owner’s equity statement only.
(d) income statement, owner’s equity statement, and balance sheet.

Which of the following items are liabilities of Siebers Mechanical Stores?
1. Cash.
2. Accounts payable.
3. Owner’s drawings.
4. Accounts receivable.
5. Supplies.
6. Equipment.
7. Salaries and wages payable.
8. Service revenue.
9. Rent expense

The following information relates to Armanda Co. for the year 2017.
Owner’s capital, January 1, 2017 $48,000
Advertising expense $ 1,800
Owner’s drawings during 2017 6,000
Rent expense 10,400
Service revenue 63,600
Utilities expense 3,100
Salaries and wages expense 29,500
After analyzing the data, prepare an income statement for the year ending December 31,
2017.

Abby Roland is the bookkeeper for Cheng Company. Abby has been trying to determine
the correct balance sheet for Cheng Company. Cheng’s balance sheet is shown below.
Prepare the correct Balance Sheet.
Page 3 of 4
QUESTION 10 Financial Statements
Little Books Inc. recently reported $3 million of net income. Its EBIT was $ 6 million, and its
tax rate was 40%. What was its interest expense?
QUESTION 11 Financial Statements
The amounts of the assets and liabilities of Future Travel Service at the end of its fiscal
year April 30, 2010, and its revenue and expenses for the year are listed below. The
company’s book value of equity excluding retained earnings is $60,560.
(a) Prepare an income statement for the year-ended April 30, 2010.
(b) Prepare a balance sheet for the year-ended April 30, 2010.
Page 4 of 4

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ENGG956 Financial Management for Engineered Assets

QUESTION 1: Name the Following:

1. A resource controlled solely by an organization that is expected to provide future

2. Claims of creditors against an entity’s assets ________________

3. It represents the total amount of assets provided by owners to a business entity.

5. Liabilities are categorized in two types:__________ and _________________

31 July 2012 31 August 2012

QUESTION 4: Transaction Analysis

1. Made cash investment to start business.

2. Purchased equipment on account.

4. Billed customers for services performed.

5. Received cash from customers billed in (4).

6. Withdrew cash for owner’s personal use.

7. Incurred advertising expense on account.

8. Purchased additional equipment for cash.

9. Received cash from customers when service was performed.

QUESTION 5: Financial Statements

QUESTION 7: Financial Statements

QUESTION 8: Financial Statements

QUESTION 9: Financial Statements

QUESTION 11 Financial Statements

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5. Liabilities are categorized in two types: and _______