Financial Accounting2
Assignment Question(s): Total Marks 10 Chapter 7 to 10
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Order Paper NowQ1. Discuss with your own examples the two methods of accounting for account receivableswith cash discounts and the two methods for estimating bad debts. (2 Marks)
(Note: Numerical Examples must include Journal entry)
Answer
Q2. X Company has the following receivables classified into individually significant and all other receivables.
|
Individually significant P Company Q Company R Company S Company All other receivables |
$ 65,000 95,000 75,000 35,000 |
270,000 425,000 |
|
Total receivables. |
695,000 |
X company determines that P’s receivable is impaired by $20,000, and S’s receivable is totally impaired. Both Q’s and R’s receivables are not considered impaired. X company also determines that a composite rate of 2% is appropriate to measure impairment on all other receivables.
Required: Calculate the total impairment on accounts Receivable (1 Mark)
Answer:
Q3. Rex Company’s record of transactions for the month of September was as follows.
|
Purchase |
Sales |
|||
|
Date |
Quantity |
Unit Price |
Date |
Units |
|
Sep 1 |
(Balance on hand) 100 |
$5.00 |
Sep 5 |
300 |
|
Sep 4 |
400 |
5.10 |
Sep 12 |
200 |
|
Sep 11 |
300 |
5.30 |
Sep 27 |
800 |
|
Sep 18 |
200 |
5.35 |
Sep 28 |
150 |
|
Sep 26 |
600 |
5.60 |
||
|
Sep 30 |
200 |
5.80 |
||
|
Total |
1,800 |
1,450 |
||
|
Total units (ending inventory) 350 |
||||
Instructions: (2 Marks)
Compute the ending inventory at September 30 on each of the following on periodic bases.
1. FIFO
2. LIFO
3. WA
Answer:
Q4. Explain the concept of LCNRV and its applicability to Agricultural Inventory and
Commodity Broker-Traders (1 Mark)
Answer:
Q5. Give numerical examples for Gross profit and retail Methods of Estimating ending Inventory. (2 Marks)
Q6. ABC Corporation borrowed SAR 150,000 at 10% interest from NCB Bank on Jan. 1, 2020, for specific purposes of constructing special-purpose equipment to be used in its operations. Construction on the equipment began on Jan. 1, 2020, and other general debt existing on Jan. 1, 2020 was:
SAR 200,000, 12%, 10-year bonds payable
SAR 100,000, 11%, 5-year note payable
The weighted-average accumulated expenditures was SAR 250,000.
Compute the Actual and Avoidable Interest and Pass journal entry for the appropriate interest to be capitalized. (2 Marks)
