FATIMAALSMIRI_ACCT201

Q1 Globalization demands a single set of high-quality international accounting standards. List the elements of High Quality Standards and explain the two major boards that sets standards. 

Answer: 3 Marks

Q2. Q2. What do you understand by deferrals and accruals in adjusting entries? Give numerical examples on how such adjusting entries are made.

(4 Marks)

Answer:

Q3. Fill in the blanks (1 Mark)

Sales Revenue – Cost of goods sold   = Gross Profit – Operating expenses =Net Profit

500,000                              ?                                       175,000 ? 76,500

? 305,800 ? 115,750 65,250

Answer:

Sales Revenue – Cost of goods sold   = Gross Profit – Operating expenses =Net Profit

500,000                       175,00076,500

305,800115,750 65,250

Q4.  a. What do you understand by allocation to non-controlling interest and discontinued operations? Explain how they are reported in the income statement. (2 Marks)

Amswer:

Q4b. Intraperiod Tax Allocation. 

XYZ Co. has income before income tax of SR 50,000. XYZ Co. has a gain of SR 10,000 from a discontinued operation. Assuming a 35 percent income tax rate, how would  XYZ Co. present the  information on the income statement, and if it had a loss of SR 10,000 from a discontinued operation. Assuming a 35 percent income tax rate, show the changes in Income on the income statement

(2 Marks)

Prepare:

1. Changes in Income on the income statement when Loss made from discontinued operations

2. Changes in Income on the income statement when Gain made on discontinued operations

Answer: 

Q5

The following information in SAR. Prepare a Cash Flow Statement:- (3 Marks)

Opening Cash Balance 15,000

Closing Cash Balance 23,000  

Increase in current liabilities 13,000  

Decrease in current assets 17,000

Fixed assets purchase 30,000

Redemption of 12% bonds 14,000

Profit for the year 18,000

Depreciation  4000