Description
- 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.
Assignment Questions: (Marks 15)
Q1. Al Khaleej Corporation purchased a new machine on January 1st, 2010. The cost of this machine was $200,000. The company estimated that the machine would have a salvage value of $20,000 at the end of its service life. Its life is estimated at 5 years and its working hours are estimated at 40,000 hours. (5 Marks)
Calculate deprecation expenses, accumulated depreciation, and book value of the machine for each of the year using:
- Straight Line Method
- Declining balance method (Based on twice the straight-line rate)
- Activity Method if Al Khaleej Corporation uses the machine hours as follows:
Year | Hours used |
2010 | 7,000 |
2011 | 8,500 |
2012 | 8,000 |
2013 | 9,000 |
2014 | 7,500 |
You can use following table to present your answer: (specimen format / table)
Year | Depreciation Expense | Accumulated Depreciation | Book Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Answer:
Q2. Riyadh Manufacturing Company exchanged equipment used in its manufacturing
operations plus $4,500 in cash for similar equipment used in the operations of Medina.
Manufacturing Company. The following information pertains to the exchange: (5 Marks)
Riyadh Manufacturing | Medina Manufacturing | |
Equipment (cost) | $63,000 | $63,000 |
Accumulated Depreciation | 42,750 | 22,500 |
Fair value of equipment | 30,375 | 34,875 |
Cash given up | 4,500 |
Required:
i. Calculate gain or loss on exchange.
ii. Prepare the journal entries to record the exchange on the books of both companies when:
- Riyadh Manufacturing has commercial substance.
- Riyadh Manufacturing lacks commercial substance
- Medina Manufacturing has commercial substance.
- Medina Manufacturing lacks commercial substance
Answer:
Q3.Presented below are the components related to an office building that Jeddah construction
Company is considering purchasing for SAR10,000,000.
Component Useful Life Value
Building structure 60-year life 5,400,000
Building engineering 30-year life 2,400,000
Building external works 30-year life 900,000
Instructions
- Compute depreciation expense for 2010, assuming that Jeddah construction uses component depreciation. ( 2.5 marks)
- Assume that the building engineering was replaced in 20 years at a cost of SAR2,600,000.
Prepare the entry to record the replacement of the old component with the new component. (2.5 marks)
Answer to Q3
Assignment (2)
Deadline: Saturday 23/11/2024 @ 23:59
Course Name: Financial Accounting
Student’s Name:
Course Code: ACCT 201
Student’s ID Number:
Semester: First
CRN:
Academic Year: 1446 H (2024-25)
For Instructor’s Use only
Instructor’s Name: DR ASHFAQUE AHMED
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.
Restricted – مقيد
College of Administration and Finance Sciences
Assignment Questions:
(Marks 15)
Q1. Al Khaleej Corporation purchased a new machine on January 1st, 2010. The cost of this
machine was $200,000. The company estimated that the machine would have a salvage value of
$20,000 at the end of its service life. Its life is estimated at 5 years and its working hours are
estimated at 40,000 hours.
(5 Marks)
Calculate deprecation expenses, accumulated depreciation, and book value of the machine for each of
the year using:
i.
Straight Line Method
ii.
Declining balance method (Based on twice the straight-line rate)
iii.
Activity Method if Al Khaleej Corporation uses the machine hours as follows:
Year
Hours used
2010
7,000
2011
8,500
2012
8,000
2013
9,000
2014
7,500
You can use following table to present your answer: (specimen format / table)
Year
Answer:
Restricted – مقيد
Depreciation Expense
Accumulated Depreciation
Book Value
College of Administration and Finance Sciences
Q2.
Riyadh Manufacturing Company exchanged equipment used in its manufacturing
operations plus $4,500 in cash for similar equipment used in the operations of Medina.
Manufacturing Company. The following information pertains to the exchange:
(5 Marks)
Riyadh Manufacturing
Medina Manufacturing
Equipment (cost)
$63,000
$63,000
Accumulated Depreciation
42,750
22,500
Fair value of equipment
30,375
34,875
Cash given up
4,500
Required:
i. Calculate gain or loss on exchange.
ii. Prepare the journal entries to record the exchange on the books of both companies when:
a) Riyadh Manufacturing has commercial substance.
b) Riyadh Manufacturing lacks commercial substance
c) Medina Manufacturing has commercial substance.
d) Medina Manufacturing lacks commercial substance
Answer:
Restricted – مقيد
College of Administration and Finance Sciences
Q3. Presented below are the components related to an office building that Jeddah construction
Company is considering purchasing for SAR10,000,000.
Component
Useful Life
Value
Building structure
60-year life
5,400,000
Building engineering
30-year life
2,400,000
Building external works
30-year life
900,000
Instructions
(a) Compute depreciation expense for 2010, assuming that Jeddah construction uses
component depreciation. ( 2.5 marks)
(b) Assume that the building engineering was replaced in 20 years at a cost of SAR2,600,000.
Prepare the entry to record the replacement of the old component with the new component.
(2.5 marks)
Answer to Q3
Restricted – مقيد
Purchase answer to see full
attachment
