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Posted: December 15th, 2023

Assignment Question(s): Total Marks 10 Chapter 7 to 10
Q1. Discuss with your own examples the two methods of accounting for account receivables with cash discounts and the two methods for estimating bad debts. (2 Marks)
(Note: Numerical Examples must include Journal entry)
Answer

Q2. X Company has the following receivables classified into individually significant and all other receivables.
Individually significant
P Company
Q Company
R Company
S Company
All other receivables
$ 65,000
95,000
75,000
35,000
270,000
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 (1 Mark)
Answer:

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 hand) 100
$5.00
Sep 5
300
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: (2 Marks)
Compute the ending inventory at September 30 on each of the following on periodic bases.
1. FIFO
2. LIFO
3. WA
Answer:

Q4. Explain the concept of LCNRV and its applicability to Agricultural Inventory and
Commodity Broker-Traders (1 Mark)
Answer:
Q5. Give numerical examples for Gross profit and retail Methods of Estimating ending Inventory. (2 Marks)

Q6. ABC Corporation borrowed SAR 150,000 at 10% interest from NCB Bank on Jan. 1, 2020, for specific purposes of constructing special-purpose equipment to be used in its operations.Construction on the equipment began on Jan. 1, 2020, and other general debt existing on Jan. 1, 2020 was:
SAR 200,000, 12%, 10-year bonds payable
SAR 100,000, 11%, 5-year note payable
The weighted-average accumulated expenditures was SAR 250,000.
Compute the Actual and Avoidable Interest and Pass journal entry for the appropriate interest to be capitalized.(2 Marks)

Answer: