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 answered 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 Question(s):(Total Marks 15)
Q1.MNC Corporation purchased a new machine on January 1st, 2015. The cost of this machine was $400,000.The company estimated that the machine would have a salvage value of $40,000 at the end of its service life.Its life is estimated at 5 years and its working hours are estimated at 40,000 hours.
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 MNC uses the machine hours as follows:( 5 marks)
| Year | Hours used |
| 2015 | 7,000 |
| 2016 | 8,500 |
| 2017 | 8,000 |
| 2018 | 9,000 |
| 2019 | 7,500 |
You can use following table to present your answer:
| Year | Depreciation Expense | Accumulated Depreciation | Book Value |
Answer:
Q2. ABC Ltd. is a metal product manufacturing company. The following are the purchases and issues during the month of July, 2024:(5 Marks)
| Date | ||
| July 1 | Beginning Inventory | 400 units @ $120 |
| July 6 | Purchase | 250 units @ $150 |
| July 11 | Purchase | 200 units @ $100 |
| July 17 | Sales | 600 units @ $300 |
| July 19 | Purchase | 150 units @ $120 |
| July 21 | Purchase | 350 units @ $160 |
| July 31 | Sales | 500 units @ $350 |
Required:
Using FIFO and Average Cost Method-
- Find out the value of Ending Inventory after each transaction.
- Find out the value of cost of goods sold after each sale.
Note: You can round off the values for the calculations under average cost method.
Answer:
Q3.Presented below are the components related to the Stadium Building that Riyadh construction Company is considering purchasing for SAR11,000,000.
ComponentUseful LifeValue
Stadium Building structure50-year life6,800,000
Stadium Building engineering25-year life3,750,000
Stadium Building external works25-year life 1,000,000
Instructions
- Compute depreciation expense for 2024, assuming that Riyadh construction uses component depreciation. (2.5 marks)
(b)Assume that the building engineering was replaced in 20 years at a cost of SAR 4,000,000. Prepare a journal entry to record the replacement of the old component with the new component. (2.5 marks)
Answer: