Accounting Question

College of Administrative and Financial SciencesAssignment 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: