Accounting Question
College of Administrative and Financial Sciences Assignment 2 Deadline: 04/05/ 2024 @ 23:59 Student’s Name: Student’s ID Number: CRN: Course Name: Financial Accounting Course Code: ACCT 201 Semester: 2 Academic Year: 2023- 24 For Instructor’s Use only Instructor’s Name: Students’ Grade: …… /15 Level of Marks: High/Middle/Low nstructions – 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 answered 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. College of Administrative and Financial Sciences Assignment Question(s): Total Marks 15 Q1. M Corp. makes a loan to N Co. and receives in exchange a three-year, SR 15,000 note bearing interest at 10 percent annually. The market rate of interest for a note of similar risk is 12 percent. Required: (4 Marks) a. How does M Corp record the receipt of the note using present value? b. Imagine the same note at zero bearing and pass journal entries using present value. (Note: PV of Interest at 12% is 2.40183 and PV of Principal at 12% is .71178) Answer: Q2. XYZ Company’s record of transactions for the month of September was as follows. Date Sep 1 Sep 4 Sep 11 Sep 18 Sep 26 Sep 30 Total Purchase Quantity Unit Price Date (Balance on $4.00 Sep 5 hand) 100 300 4.50 Sep 12 200 5.00 Sep 27 200 5.25 Sep 28 500 5.50 200 5.75 1,500 Total units (ending inventory) 350 Sales Units 200 150 600 200 1,150 Required: (4 Marks) Compute the ending inventory and COGS at September 30 on each of the following on periodic bases. 1. FIFO 2. WA College of Administrative and Financial Sciences Answer: Q3 IFRS requires capitalizing actual interest (with modification) Consistent with historical cost. Capitalization considers three items: 1. Qualifying assets. 2. Capitalization period. 3. Amount to capitalize. Explain the above with numerical examples. (4 Marks) Answer: Q4 A long-lived tangible asset is impaired when a company is not able to recover the asset’s carrying amount either through using it or by selling it. The management to identify whether the asset has impairment or no impairment conducts an impairment test. Explain how the impairment test conducted in both situations with numerical examples. (3 Mark) Answer:
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