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Saudi Electronic University - ACCT 201 FINANCIAL ACCOUNTING ACCT 201 ASSIGNMENT 2 Q1) Differentiate Cash basis vs
Saudi Electronic University - ACCT 201
FINANCIAL ACCOUNTING ACCT 201
ASSIGNMENT 2
Q1) Differentiate Cash basis vs. accrual basis of accounting.
Q2. Presented below are selected accounts of Aramco Company at December 31, 2010.
|
FinishedGoods |
SAR 52,000 |
Cost of GoodsSold |
SAR 2,100,000 |
|
Revenue Received in Advance |
90,000 |
Notes Receivable |
40,000 |
|
Equipment |
253,000 |
AccountsReceivable |
161,000 |
|
Work-in-Process |
34,000 |
RawMaterials |
187,000 |
|
Cash |
42,000 |
Supplies Expense |
60,000 |
|
Trading Securities |
29,000 |
Allowance for DoubtfulAccounts |
12,000 |
|
Customer Advances |
36,000 |
Licenses |
18,000 |
|
Cash Restricted for Plant Expansion |
50,000 |
Share Premium - Ordinary |
88,000 |
|
|
Treasury Stock |
22,000 |
|
The notes receivables are due April 30, 2012, with interest receivable every April 30. The notes bear 6% interest (Hint: Accrue interest due on December 31, 2010.)
Instructions:
Prepare the current assets section of AramisCompany’sDecember 31, 2010, statement of financial position, with appropriate disclosures.
Q3. Record the following transactions of Reed Co. in the desired manner and give the adjusting entry on December 31, 2010. (Two entries for each part.)
- An insurance policy for two years was acquired on April 1, 2010 for $8,000.
- Rent of $12,000 for six months for a portion of the building was received on November 1, 2010.
Q4. Prepare a statement of cash flows of Stanislaus Co. for the year ending December 31, 2012
|
|
|
December 31 |
|
2011 |
2012 |
|
|
Land |
$ 58,800 |
$ 21,000 |
|
Equipment................................................ |
504,000 |
789,600 |
|
Inventory.................................................. |
168,000 |
201,600 |
|
Accounts receivable (net)........................ |
84,000 |
151,200 |
|
Cash......................................................... 42,000 |
63,000 |
|
|
TOTAL.......................................... $856,800 |
$1,226,400 |
|
|
Share capital–ordinary............................ $420,000 |
$ 487,200 |
|
|
Retained earnings........................................ 67,200 |
205,800 |
|
|
Notes payable - Long-term........................ 168,000 |
302,400 |
|
|
Notes payable - Short-term......................... 67,200 |
29,400 |
|
|
Accounts payable......................................... 50,400 |
86,000 |
|
|
Accumulated depreciation...................... 84,000 |
115,600 |
|
|
TOTAL.......................................... $856,800 |
$1,226,400 |
|
Additional data for 2012:
- Net income was $235,200.
- Depreciation was $31,600.
- Land was sold at its original cost.
- Dividends of $96,600 were paid.
- Equipment was purchased for $84,000 cash.
- A long-term note for $201,600 was used to pay for an equipment purchase.
- Share capital–ordinary was issued to pay a $67,200 long-term note payable.
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