Accounting Question

College of Administration and Finance SciencesAssignment (2)
Deadline: Saturday 27/07/2024 @ 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.
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Assignment Question(s):
(Marks 30)
Q1- A. What is a bank reconciliation and why is it important for companies to do it
periodically?
B. Prepare a Bank Reconciliation Statement for XYZ company that has:
• Bank statement of SR9,000.
•
Cash account of SR7,500.
Additional information for the reconciliation:
✓ Deposit in transit.
✓ NSF Check.
✓ Outstanding check.
✓ Collections made by the bank.
Required: provide an amount of each information to bring the adjusted balances to
be equal (5 Marks).
Answer:
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Q2- Discuss the different methods available to account for bad debts. Assume that
you have a company. And the management estimates that 2.5% of sales will be
uncollectible.
Provide an amount of sales and prepare the journal entry using the percent of sales
method (5 Marks).
Answer:
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Q3- You are a senior accountant and you were approached by an entrepreneur of a
small business to provide a consultation regarding depreciation. The entrepreneur
does not understand why he should depreciate his companies PPE and what
options he has for depreciation. Thus, you are asked to persuade him regarding the
importance of depreciation and the different alternatives available for him. Which
deprecation method do you recommend and why. (5Marks).
Answer:
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Q4- Sultan Company has credit sales of $2.60 million for year 2016. On December
31, 2016, the company’s Allowance for Doubtful Accounts has an unadjusted
credit balance of $14,905. Sultan prepares a schedule of its December 31, 2016,
accounts receivable by age. On the basis of past experience, it estimates the percent
of receivables in each age category that will become uncollectible. This
information is summarized here. (5Marks).
December 31, 2011
Accounts Receivable
Age of Accounts
Receivable
Expected Percent
Uncollectible
$730,000
Not Yet Due
1.25%
354,000
1 to 30 days past due
2.00%
76,000
31 to 60 days past due
6.50%
48,000
61 to 90 days past due
32.75%
12,000
over 90 days past due
67.00%
Calculate:
1. Using the aging of accounts receivable method, find the estimate the
required balance of the Allowance for Doubtful Accounts at December 31,
2016.
2. Prepare the adjusting entry to record bad debts.
Answer:
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Q5- Use the following financial statements to calculate any five different financial
ratios and give your opinion about each one. Important note: last period’s numbers
equals current period’s numbers less $5,000. This applies to all totals in the below
financial statements. (5 Marks)
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Answer:
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College of Administration and Finance Sciences
Q6- Why would corporations offer stock dividends? What are the different
methods to account for stock dividends? Support your answer with proper numeric
examples. Write no less than 300 words. (5 Marks)
Answer:
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