Description
Assignment Question(s): (Marks: 15)
Question 1: (5 Marks)
During June, the following changes in inventory took place:
June1Balance1,400 units @SR 24
14Purchased900 units @36
24Purchased700 units @30
8Sold400 units @50
10Sold1,000 units @40
29Sold500 units @44
Perpetual inventories are maintained in units only.
Instructions
What is the cost of the ending inventory under the following methods?(Show calculations.)
(a)FIFO.
(b)Average Cost.
Question 2: (5 Marks)
A Company began operations in 2020 and determined its ending inventory at cost and at a LCNRV at December 31, 2020, and December 31, 2021. This information is presented below.
CostNet Realizable Value
31/12/20 SR 520,000SR 485,000
31/12/21615,000585,000
Instructions
(a)Prepare the journal entries required at December 31, 2020, and December 31, 2021, assuming that the inventory is recorded at LCNRV, using a perpetual inventory system and the cost-of-goods-sold method.
(b) Prepare the journal entries required at December 31, 2020, and December 31, 2021, assuming that the inventory is recorded at cost, using a perpetual system and the loss method.
(c)Which of the two methods above provides the higher net income in each year?
Question 3:(5 Marks)
On March 1, a Company began construction of a small building. The following expenditures were incurred for construction:
March 1SR75,000April 1SR74,000
May 1180,000June 1270,000
July 1100,000
The building was completed and occupied on July 1. To help pay for construction SR50,000 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a SR500,000, 10% note issued two years ago.
Instructions
(a)Calculate the weighted-average accumulated expenditures.
(b)Calculate avoidable interest.
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College of Administration and Financial Sciences
Assignment (2)
Deadline: Saturday 11/11/2023 @ 23:59
Course Name: Financial Accounting
Student’s Name:
Course Code: ACCT201
Student’s ID Number:
Semester: First Term 23/24
CRN:
Academic Year: 1445 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
/15
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.
College of Administration and Financial Sciences
Assignment Question(s):
Question 1:
(Marks: 15)
(5 Marks)
During June, the following changes in inventory took place:
June 1 Balance
1,400 units @
14 Purchased
900 units @
24 Purchased
700 units @
8 Sold
400 units @
10 Sold
1,000 units @
29 Sold
500 units @
Perpetual inventories are maintained in units only.
SR 24
36
30
50
40
44
Instructions
What is the cost of the ending inventory under the following methods? (Show calculations.)
(a) FIFO.
(b) Average Cost.
College of Administration and Financial Sciences
Question 2:
(5 Marks)
A Company began operations in 2020 and determined its ending inventory at cost and at
a LCNRV at December 31, 2020, and December 31, 2021. This information is presented below.
Cost
Net Realizable Value
31/12/20
SR 520,000
SR 485,000
31/12/21
615,000
585,000
Instructions
(a) Prepare the journal entries required at December 31, 2020, and December 31, 2021,
assuming that the inventory is recorded at LCNRV, using a perpetual inventory system
and the cost-of-goods-sold method.
(b) Prepare the journal entries required at December 31, 2020, and December 31, 2021,
assuming that the inventory is recorded at cost, using a perpetual system and the loss
method.
(c) Which of the two methods above provides the higher net income in each year?
College of Administration and Financial Sciences
Question 3:
(5 Marks)
On March 1, a Company began construction of a small building. The following
expenditures were incurred for construction:
March 1
May 1
July 1
SR 75,000
180,000
100,000
April 1
June 1
SR 74,000
270,000
The building was completed and occupied on July 1. To help pay for construction SR50,000 was
borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during
the year was a SR500,000, 10% note issued two years ago.
Instructions
(a) Calculate the weighted-average accumulated expenditures.
(b) Calculate avoidable interest.
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