Financial Accounting

Assignment (1)

Deadline:

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

   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: