ACCT201 SEU Intermediate financial accounting discussion questions

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ACCT 201

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Q1. Explain the statement of financial position and its uses and limitations. (2 marks)

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. (2 marks)

Q3. Calculate cash flow from operating activities from the following data: ( 3 marks)

  • Profits made during the year $ 145,000 after considering the following items :

Amortization of Goodwill3,000

Depreciation of Fixed Assets17,000

Loss on Sale of Fixed Assets2,500

Transfer to General Reserve15,000

The following is the position of current assets and current liabilities:

Particulars

31.3.07

31.3.08

Creditors

Debtors

Prepaid Expenses

Bills Payable

12,000

16,200

250

5,000

8,200

12,000

750

7,000

Q4. CHO Company was formed on December 1, 2009. The following information is available from Jones's inventory record for Product X.

UnitsUnit Cost

January 1, 2010 (beginning inventory)1,600$18.00

Purchases:

January 5, 20102,600$20.00

January 25, 20102,400$21.00

February 16, 20101,000$22.00

March 15, 20101,800$23.00

A physical inventory on March 31, 2010, shows 2,500 units on hand.

Prepare schedules to compute the ending inventory at March 31, 2010, using Weighted-average. ( 3 marks)

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FINANCIAL ACCOUNTING ACCT 201 ASSIGNMENT 2 Q1. Explain the statement of financial position and its uses and limitations. (2 marks) 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. (2 marks) Q3. Calculate cash flow from operating activities from the following data: ( 3 marks) • Profits made during the year $ 145,000 after considering the following items : Amortization of Goodwill 3,000 Depreciation of Fixed Assets 17,000 Loss on Sale of Fixed Assets 2,500 Transfer to General Reserve 15,000 The following is the position of current assets and current liabilities: Particulars 31.3.07 31.3.08 Creditors Debtors Prepaid Expenses Bills Payable 12,000 16,200 250 5,000 8,200 12,000 750 7,000 Q4. CHO Company was formed on December 1, 2009. The following information is available from Jones's inventory record for Product X. January 1, 2010 (beginning inventory) Purchases: January 5, 2010 January 25, 2010 February 16, 2010 March 15, 2010 Units 1,600 Unit Cost $18.00 2,600 2,400 1,000 1,800 $20.00 $21.00 $22.00 $23.00 A physical inventory on March 31, 2010, shows 2,500 units on hand. Prepare schedules to compute the ending inventory at March 31, 2010, using Weightedaverage. ( 3 marks)
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Outline
Quiz 1. Explanation of the statement of financial position uses and its limitation
Uses of Statement of the financial position
Limitations of the statement of the financial position
Quiz. 2
Quiz 3.
Quiz. 4
CHO Company
References


Running Head: FINANCIAL ACCOUNTING ACCT 201

Financial Accounting ACCT 201
Student’s Name
Institutional Affiliation

1

FINANCIAL ACCOUNTING ACCT 201

2

Quiz 1. Explanation of the statement of financial position uses and its limitation
Statement of financial position is referred to as the Balance Sheet. It is a critical statement
which shows the current financial position of an organization on a certain date. It reflects the
position of equity, liabilities and assets of the company on a particular period of reporting.
Balance sheet is one of the critical books of accounts in an organization alo...


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