Accounting Question

College of Administrative and Financial SciencesAssignment 2
Deadline: (end of week 9) 20 /03/ 2021 @ 23:59
Course Name: Financial Accounting
Course Code: ACCT 201
Semester: 2
Academic Year: 2020 – 21
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Instructor’s Name:
Student’s Name:
Student’s ID Number:
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Students’ Grade: …… /5
Level of Marks: High/Middle/Low
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•
Submissions without this cover page will NOT be accepted.
Assignment Question(s): Marks 5
Chapters covered 7,8 & 9
Q1. Discuss with your own examples the two methods of accounting for receivables and the two
methods for estimating bad debts. (Note: Examples must include Journal entry)
Q2. X Company has the following receivables classified into individually significant and all
other receivables.
Individually significant
P Company
$ 65,000
Q Company
95,000
R Company
75,000
S Company
35,000
270,000
All other receivables
425,000
Total receivables.
695,000
X company determines that P’s receivable is impaired by $20,000, and S’s receivable is totally
impaired. Both Q’s and R’s receivables are not considered impaired. X company also determines
that a composite rate of 2% is appropriate to measure impairment on all other receivables.
Required: Calculate the total impairment on accounts Receivable
Account’s receivables impairments
Individually assessed receivables
P Company
$20.000
S Company
$35,000
Collectively assessed receivable
$425,000
Q Company
$95,000
R Company
$75,000
Total collectively assessed receivable $595,000
Collectively assessed impairment $11,900
Total impairment
$66,900
Q3. Rex Company’s record of transactions for the month of September was as follows.
Purchase
Sales
Date
Quantity
Unit Price
Date
Units
Sep 1 (Balance on
$5.00
Sep 5
300
hand) 100
Sep 4
400
5.10
Sep 12
200
Sep 11
300
5.30
Sep 27
800
Sep 18
200
5.35
Sep 28
150
Sep 26
600
5.60
Sep 30
200
5.80
Total
1,800
1,450
Total units (ending inventory) 350
Instructions:
Compute the ending inventory at September 30 on each of the following on periodic bases.
1. FIFO
Units
Amount
Out of Sep 26
150
150*5.60 = 840
Out of Sep 30
200
200*5.80 = 1,160
Amount= $2,000
2. LIFO
Units
Amount
Out of Sep 1
100
100*5=500
Out of Sep 4
250
250*5.10=1,275
Amount=$1,775
3. WA
Weight average cost per unit= Cost of goods available for sale
Number of units available for sale
= (100*5+400*5.10+300*5.3+200*5.35+600*5.6+200*5.8) =5.4 Per unit
1800
Ending inventory = 350*5.4= $1,890
Q4. Explain the concept of LCNRV and its applicability to Agricultural Inventory and
Commodity Broker-Traders
Q5. Give examples for Gross profit and retail Methods of Estimating Inventory.