Financial Accounting
Assignment (1)
Deadline: Saturday 7/10/2023 @ 23:59
| Course Name: Financial Accounting | Student’s Name: |
| Course Code: ACCT201 | Student’s ID Number: |
| Semester: First Term 23/24 | CRN: |
| Academic Year: 1445 H | |
For Instructor’s Use only
| Instructor’s Name: | |
| Students’ Grade: /15 | Level of Marks: High/Middle/Low |
Instructions – PLEASE READ THEM CAREFULLY
- The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
- Assignments submitted through email will not be accepted.
- Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
- Students must mention question number clearly in their answer.
- Late submission will NOT be accepted.
- Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
- All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism.
- Submissions without this cover page will NOT be accepted.
Assignment Question(s): (Marks: 15)
Question 1: (4 Marks)
List and discuss the characteristics of the International Accounting Standards Board (IASB) that reinforced the importance of an open, transparent and independent process.
Answer to Q1:
Question 2: (4 Marks)
Khaled Corporation’s capital structure consists of 50,000 ordinary shares. At December 31, 2022 an analysis of the accounts and discussions with company officials revealed the following information:
Sales SAR1,100,000
Purchase discounts 18,000
Purchases 642,000
Loss on discontinued operations (net of tax) 42,000
Selling expenses 128,000
Cash 60,000
Accounts receivable 90,000
Share capital 200,000
Accumulated depreciation 180,000
Dividend revenue 8,000
Inventory, January 1, 2011 152,000
Inventory, December 31, 2011 125,000
Unearned service revenue 4,400
Accrued interest payable 1,000
Land 370,000
Patents 100,000
Retained earnings, January 1, 2011 290,000
Interest expense 17,000
General and administrative expenses 150,000
Dividends declared 29,000
Allowance for doubtful accounts 5,000
Notes payable 200,000
Machinery and equipment 450,000
Materials and supplies 40,000
Accounts payable 60,000
The amount of income taxes applicable to ordinary income was SAR48,600, excluding the tax effect of the discontinued operations loss, which amounted to SAR18,000.
Instructions
(a) Prepare an income statement. (2 marks)
(b) Prepare a retained earnings statement. (2 marks)
Answer to Q2:
Question 3: (4 Marks)
The following trial balance was taken from the books of ALHANA Company on December 31, 2022.
Account Debit Credit
Cash SAR 12,000
Accounts Receivable 40,000
Note Receivable 7,000
Allowance for Doubtful Accounts SAR 1,800
Merchandise Inventory 44,000
Prepaid Insurance 4,800
Furniture and Equipment 125,000
Accumulated Depreciation–F. & E. 15,000
Accounts Payable 10,800
Share Capital–Ordinary 44,000
Retained Earnings 55,000
Sales 280,000
Cost of Goods Sold 111,000
Salaries Expense 50,000
Rent Expense 12,800
Totals SAR406,600 SAR406,600
At year-end, the following items have not yet been recorded.
a. Insurance expired during the year, SAR2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on furniture and equipment, 10% per year.
d. Interest at 6% is receivable on the note for one full year.
e. Rent paid in advance at December 31, SAR5,400 (originally charged to expense).
f. Accrued salaries at December 31, SAR5,800.
Instructions
(a) Prepare the necessary adjusting entries. (2 marks)
(b) Prepare the necessary closing entries. (2 marks)
Answer to Q3:
Question 4: (3 Marks)
Prepare balance sheet in proper form for Golden Tulip hotel from the following list of the accounts at November 30 2022:
| Accounts receivable | SAR10,000 |
| Accounts payable | 18,000 |
| Building | 28,000 |
| Common stock | 30,000 |
| Cash | 8,000 |
| Notes payable | 45,000 |
| Office equipment | 12,000 |
| Retained earnings | ? |
| Trucks | 55,000 |
Answer to Q4:
