Overview
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Assignment Questions:(Marks 15)
Q-1The following trial balance has been extracted from the book of ARMCN Company on March 31, 2024.
You are required to prepare an Income Statement for the year ended on 31 March 2024 and a Balance Sheet as on the date. The closing stock amounted to SR 14,220. (2.5 +2.5 = 5 marks)
Balances of Accounts (Trial balance)
Particulars | Amount SR (in thousands) |
Debtors | 12,000 |
Creditors | 7,900 |
Capital | 30,000 |
Drawings | 2,900 |
Rent and rates | 250 |
Trade expenses | 670 |
Purchases | 8,640 |
Sales | 14,290 |
Returns Outwards | 280 |
Returns Inwards | 190 |
Carriage Inwards | 250 |
Wages | 2,920 |
Salaries | 1,200 |
Stock (January 1. 2024) | 3,100 |
Discount received | 240 |
Discount allowed | 180 |
Bad debts | 200 |
Plant and Machinery | 2,510 |
Furniture and Fixture | 1,800 |
Cash in hand | 500 |
Cash at Bank | 15,400 |
Answer - Solution –
Q.2The following trial balance was taken from the books of SAMCO Company on December 31, 2024.
Account | Debit SR | Credit SR |
Cash | 12,000 | |
Accounts Receivable | 40,000 | |
Note Receivable | 7,000 | |
Allowance for Doubtful Accounts | 1,800 | |
Merchandise Inventory | 44,000 | |
Prepaid Insurance | 4,800 | |
Furniture and Equipment | 125,000 | |
Accumulated Depreciation--F. & E. | 15,000 | |
Accounts Payable | 10,800 | |
Share Capital–Ordinary | 44,000 | |
Retained Earnings | 55,000 | |
Sales | 280,000 | |
Cost of Goods Sold | 111,000 | |
Salaries Expense | 50,000 | |
Rent Expense | 12,800 | |
406,600 | 406,600 |
At year-end, the following items have not yet been recorded.
a.Insurance expired during the year, SAR2,000.
b.Estimated bad debts, 1% of gross sales.
c.Depreciation on furniture and equipment, 10% per year.
d.Interest at 6% is receivable on the note for one full year.
e.Rent paid in advance on December 31, SAR5,400 (originally charged to expense).
f.Accrued salaries on December 31, SAR5,800.
Instructions
(a)Prepare the necessary adjusting entries. (2.5 marks)
(b)Prepare the necessary closing entries. (2.5 marks)
Answer to Q2:
Q.3. AMCO Co. had an income before income tax of SR 100,000 as of 31st March 2024. It had a gain of SR 20,000 from a discontinued operation. Assuming a 45 percent income tax rate, how would AMCO Co. present the information on the income statement?And, if it had loss of SR 20,000 from a discontinued operation. Assuming a 45 percent income tax rate, show the changes in Income on the income statement as of 31stMarch 2024.
Prepare:
1. Changes in Income on the income statement when Loss made from discontinued operations. (2.5 marks)
2. Changes in Income on the income statement when Gain made on discontinued operations. (2.5 marks)
ANSWER:
Restricted - مقيد