5 questions about accounting

Page 1College of Administration and Finance Sciences
Assignment (1)
Deadline: Saturday 13/07/2024 @ 23:59
Course Name: Principles of Accounting Student’s Name:
Course Code: ACCT490 Student’s ID Number:
Semester: Summer CRN:
Academic Year: 1445-6 H
For Instructor’s Use only
Instructor’s Name: Habiba Moabber
Students’ Grade: /30 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.
• Add at least 3 references!
Page 2
College of Administration and Finance Sciences
Q1. Give financial transactions details that would reflect the following cases (for your
convenience, an example is provided). Do not forget to give full information (i.e. date,
name of the business, amount of the transaction. etc.)
1. A transaction that would increase assets and increase equity.
2. A transaction that would decrease assets and decrease equity.
3. A transaction that would increase assets and decrease Liabilities.
4. A transaction that would decrease assets and increase Liabilities.
5. A transaction that would increase assets and decrease assets.
Example: A transaction that would decrease assets and decrease equity.
(possible solution: On May 6th Alfa company paid wages salaries for $24,000
cash)
(5 Mark)
ANSWER:
Q2. Bello Co. is an event organizer business. Bello was established in 2018. You are
provided with the following financial statement with some missing values for the
years 2018, 2019 and 2020. You are requested to complete those statements. In order
to solve the question you have to start with 2018 statements and work forward to
subsequent years. Remember that Bello was established in 2018, thus the beginning
balance for retained earnings in 2018 is zero.
Bello Co. Income statement For the year ended December 31 20XX
(5 Mark)
Bello Co.
Income statement
For the year ended December 31 20XX
2020 2019 2018
Revenues 100,000 ? 50,000
Expenses:
Rent ? 58,500 ?
Salaries 1,500 ? 1,500 ? 2,500 ?
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College of Administration and Finance Sciences
Net Income ? 20,000 ?
Bello Co.
Retained Earnings statement
For the year ended December 31 20XX
2020 2019 2018
Beginning retained earnings ? ? 0
Plus: Net income ? 20,000 ?
? ? 12,500
Less: Dividends 15,000 ? ?
Ending retained earnings 30,000 ? ?
Bello Co.
Balance Sheet
As of December 31 20XX
2020 2019 2018
Assets:
Cash ? ? 25,000
A/R 32,500 25,000 ?
Building 90,000 90,000 90,000
Total Assets ? 144,500 ?
Liabilities:
A/P ? 500 1,000
Notes payable 5,000 ? ?
Total Liabilities 5,500 15,500 ?
Equity:
Common stock ? ? 114,000
Retained earnings ? 15,000 ?
Total Equity ? ? 119,000
Total Equity and
Liabilities
149,500 ? 150,000
Q3. Flypeople a local air carrier and SEU an educational institution, both are Saudi
companies which exchange services with one another all the time. Both companies
prepare their financial reports on monthly basis and were engaged in the following
transactions during May 2024:
1. SEU purchased 2 flight tickets for SR2,400 paying cash. The flights are
scheduled for November 2024.
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College of Administration and Finance Sciences
2. Flypeople has a fleet of vehicles worth SR11,900,000. The average useful life
for those vehicles is 11 years with salvage value of SR125,000. Flypeople uses
straight-line depreciation method.
3. SEU as a governmental institution, it credits employees salaries on the 27th of
each month. Due to some system failure in May, salaries payment was
postponed to June 3rd. Total salaries due is SR13,000,000.
4. During May Flypeople had a balance of SR9,500 for cargo services provided to
SEU but not yet billed to them.
Required: prepare adjusting entries for both Flypeople and SEU whenever
applicable for the month of May 2024.
(5 Mark)
ANSWER:
Q4. The Accounting Cycle constitute of 10 sequel steps. List those steps and discuss
the meaning and importance of each one of them.
(5 Mark)
ANSWER:
Q5. Differentiate between periodic inventory system and perpetual inventory system.
(5 Mark)
ANSWER: