Overview
- 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. (a) Discuss the significance of financial reporting for a business organization from the perspective of internal and external users of financial information. Identify the role of IASB and FASB in developing the “Conceptual Framework for Financial Reporting” in the establishment of compatible standards worldwide.
Q1. (b) Which accounting standards are used in Saudi Arabia? Is there any international accounting standard being followed Saudi Arabia? Support your answer with example.
(a 2.5+ b 2.5 with example= 5 marks)
Q.2.XYZ Co. had an income before income tax of SR 50,000 as of 31st March 2023. It had 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 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 as of 31st March 2023.
Prepare:
- Changes in Income on the income statement when Loss made from discontinued operations. (2.5 marks)
- Changes in Income on the income statement when Gain made on discontinued operations. (2.5 marks)
Q.3.Assume that before issuing the audit report for the year ended December 31, 2022, the beginning retained earnings had a balance of $ 85,000.
It discovered a $20,000 error undervalued inventory that overstated the net income to be higher in 2011 and an overvalued depreciation amount of $5,000 which understated net income in 2011.
Would this discovery have an impact on the Statement of Retained Earnings for 2022?
What would be the ending retained earnings on 31st Dec 2022 if dividends of 7,500 were paid. (5 marks )