review and correct if needed my answer on the accounting Question

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please review and correct if needed my answer on the accounting Question that i attched

Instructions – PLEASE READ THEM CAREFULLY
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation.
• 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.
Assignment Question(s):
(Marks 15)
Q1. Abdulaziz Co. purchased a machine in 2013 for SAR 50,000 that has a useful life of 5 years
with a salvage value of SAR 5,000.
Calculate the depreciation expense, accumulated depreciation, book value throughout its useful life
using:
1- Straight-line Method.
2- Units of Production Method if the machine produces 100,000 units.
Here is a table of units produced each year:
First
Second Third Fourth
23,000 25,000
–
Fifth
30,000 22,000
3- Double Declining Balance Method (5 Marks).
Q2- On June 1, 2019, ABC Company signed a SAR 25,000, 120-day, 6% note payable to cover a
past due account payable.
a. What is the total amount of interest to be paid on this note?
b. Prepare ABC Company’s general journal entry to record the issuance of the note payable
c. Prepare ABC Company’s general journal entry to record the payment of the note on September 29,
2019 (5 marks).
Q3- Assume that you have a company. The management estimates that 2.5% of sales will be
uncollectible.
Give any amount of sales and prepare the journal entry using the percent of sales method (5 marks).
Answer :
1- Straight-line Method:
Depreciation Expense per year = (Cost of machine – Salvage value) / Useful life
= (50,000 – 5,000) / 5 = 9,000 SAR per year
Year
Depreciation
Accumulated
Accumulated
Book value
Expense
Depreciation
Depreciation
50,000
2013
9,000
9,000
9,000
41,000
2014
9,000
9,000
18,000
32,000
2015
9,000
9,000
27,000
23,000
2016
9,000
9,000
36,000
14,000
2017
9,000
9,000
45,000
5,000
45,000
45,000
2. Units of Production Method if the machine produces 100,000 units.
Units of Production Method: Depreciation Expense per unit = (Cost of machine – Salvage value)
/Total units of production = (50,000 – 5,000) / 100,000 = 0.45 SAR per unit
Year
Units
Depreciation
Accumulated
Book value
Expense
Depreciation
50,000
2013
23,000
10,350
10,350
39,650
2014
25,000
11,250
21,600
28,40
21,600
28,400
2015
2016
30,000
13,500
35,10
14,900
2017
22,000
9,900
45,000
5,000
100,000
45,000
3- Double Declining Balance Method
Step1: Straight-Line:
100% / Useful life = 100% / 5 = 20%
Step2: Double-declining balance rate
= 2 * Straight-line rate = 2 * 20% = 40%
Step3: Depreciation Expenses = Double-declining balance rate * Begging period book value
= 40% * 50,000 = 20,000
Depreciation expenses for 2013 = 20,000
Depreciation expenses for 2014 = 40% (50,000 – 20,000) = 12,000
Depreciation expenses for 2015 = 40% (30,000-12,000) = 7,200
Depreciation expenses for 2016 = 40% (18,000-7,200) = 4,320
Depreciation expenses for 2017= 40% (10,800-4,320) = 2,592
Year
Depreciation
Accumulated
Book value
expenses
Depreciation
50,000
2013
20,000
20,000
30,000
2014
12,000
32,000
18,000
2015
7,200
39,200
10,80
2016
4,320
43,520
6,480
2017
2,592
46,112
3,888
46,112
Q2- On June 1, 2019, ABC Company signed a SAR 25,000, 120-day, 6% note payable to cover a
past due account payable.
a. What is the total amount of interest to be paid on this note?
Principal of the note * Annual interest rate * Time expressed in years = interest
25,000 SAR * 6% (0.06) * 120/360 = 500.00 SAR
b. Prepare ABC Company’s general journal entry to record the issuance of the note payable
Date: June 1, 2019
Debit
Accounts Payable
25,000
Credit Notes Payable
25,000
c. Prepare ABC Company’s general journal entry to record the payment of the note on
September 29.
Date: 29 Sep 2019
Debit Notes Payable
25,000
Interest Exp
500
Credit
Cash
25,500
Q3- Assume that you have a company. The management estimates that 2.5% of sales will be
uncollectible. Give any amount of sales and prepare the journal entry using the percent of sales
method (5 marks).
Answer :
Rawan’s company had Credit sales of 17,000 SAR in 2022
Estimated bad debt expense = 17,000 SAR * 2.5% (0.025) = 425 SAR
The journal entry record for the percent of sales method will be:
Dec.31 2022 Debit bad debts expense
425
Credit Allowance for Doubtful Accounts
425
Reference:
Wild, J. (2012). Financial Accounting: Information for Decisions. McGraw-Hill/Irwin.