Tutorial 1

1 In the context of the following disclosure by Emirates (Annual Accounts 2015) describe: (a) the
fundamental quality of ‘relevance’; and [3] (b) one enhancing quality associated with the disclosure. [2]

Consolidated Income Statement 2018 2017

for the year ended 31 March
2018

AED m AED m

Revenue 86,278 80,717

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2 (a) What is the going concern assumption? [2] (b) How would ceasing to be a going concern affect:

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2 (b) How would ceasing to be a going concern affect: (i) Property, Plant and Equipment (ii) Debt
maturing in only 2 years from today
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3 What accounting entries (if any) will be made by Emirates airline in relation to the following
information? Explain the rationale behind your entries.

(a) When a booking is made by an agent for travel in 2 months.

(b) When the agent pays cash a few days after the booking.

(c) When the flight for which the booking was made, completes.

(a) no entry

(b) _Cash

Unearned Revenue

(c) Unearned Revenue

Service Revenue

4—Income measures.
Presented below is information related to Watt Company in its first year of operation. The
following information is provided at December 31, 2015, the end of its first year.

Sales revenue €420,000

Cost of good sold 210,000

Selling and administrative expenses 75,000

Gain on sale of plant assets 45,000

Unrealized gain on non-trading securities 15,000

Financing costs 10,000

 Loss on discontinued operations 20,000

Allocation to non-controlling interest 60,000

Dividends declared and paid 12,000

Compute the following (a) income from operations, (b) net income, (c) net income attributable to
Watt Company shareholders, (d) comprehensive income, and (e) retained earnings balance at
December 31, 2015.

5.(Changes in Equity) The equity section of Hasbro Inc. at January 1, 2015, was as follows.

Share capital—ordinary 
 $300,000

Accumulated other comprehensive income

Unrealized holding gain on non-trading equity securities 50,000

Retained earnings 20,000

During the year, the company had the following transactions

Issued 10,000 shares at $3 per share. 


1. Dividends of $9,000 were declared and paid. 


2. Net income for the year was $100,000. 


4.Unrealized holding loss of $5,000 occurred on its non-trading equity securities.

Instructions

Prepare a statement of changes in equity for Hasbro Inc.