College of Administration and Financial SciencesList and discuss the characteristics of the International Accounting Standards Board
(IASB) that reinforced the importance of an open, transparent and independent process.
Answer to Q1:
The International Accounting Standards Board (IASB) is a private sector, independent,
non-profit organization that develops and publishes International Financial Reporting
Standards (IFRS). IFRSs are high-quality, global accounting standards that are used by
more than 140 countries around the world.
The IASB’s due process is designed to be open, transparent, and independent. This is
important because IFRSs are used by a wide range of stakeholders, including investors,
creditors, government regulators, and standard-setters. It is important that all of these
stakeholders have a voice in the development of IFRSs and that they can be confident
that the IASB’s decision-making process is fair and impartial.
The following characteristics of the IASB reinforce the importance of an open,
transparent, and independent process:
Membership: The IASB’s membership is diverse, with members from different countries
and professional backgrounds. This helps to ensure that the IASB’s standards are
developed with a global perspective and that they take into account the needs of
different stakeholders.
Autonomy: The IASB is autonomous, meaning that it is not subject to the control of any
government or other organization. This helps to ensure that the IASB’s standards are
developed independently and that they are not influenced by special interests.
Independence: IASB members must sever all ties to their previous employers and they
are not allowed to represent any particular interest group. This helps to ensure that
IASB members make their decisions based on what is in the best interests of the public,
rather than on the interests of any particular stakeholder group.
Voting: IASB standards are approved by a vote of the IASB’s members. A majority of 14
votes is required to approve a standard. This helps to ensure that all IASB members
have a say in the development of standards and that no one member or interest group
can dominate the decision-making process.
College of Administration and Financial Sciences
In addition to these characteristics, the IASB also follows a rigorous due process when
developing IFRSs. This due process includes public consultation, exposure drafts, and
a final round of voting. The IASB also has a number of safeguards in place to ensure
that its standards are of high quality and that they are consistent with its conceptual
framework.
Overall, the IASB’s characteristics and due process help to ensure that its standards are
developed in an open, transparent, and independent manner. This is important because
IFRSs are used by a wide range of stakeholders around the world and they have a
significant impact on the global economy.
Question 2:
(4 Marks)
Khaled Corporation’s capital structure consists of 50,000 ordinary shares. At December 31,
2022 an analysis of the accounts and discussions with company officials revealed the following
information:
Sales
Purchase discounts
Purchases
Loss on discontinued operations (net of tax)
Selling expenses
Cash
Accounts receivable
Share capital
Accumulated depreciation
Dividend revenue
Inventory, January 1, 2011
Inventory, December 31, 2011
Unearned service revenue
Accrued interest payable
Land
Patents
Retained earnings, January 1, 2011
Interest expense
General and administrative expenses
Dividends declared
SAR1,100,000
18,000
642,000
42,000
128,000
60,000
90,000
200,000
180,000
8,000
152,000
125,000
4,400
1,000
370,000
100,000
290,000
17,000
150,000
29,000
College of Administration and Financial Sciences
Allowance for doubtful accounts
Notes payable
Machinery and equipment
Materials and supplies
Accounts payable
5,000
200,000
450,000
40,000
60,000
The amount of income taxes applicable to ordinary income was SAR48,600, excluding the tax
effect of the discontinued operations loss, which amounted to SAR18,000.
Instructions
(a) Prepare an income statement. (2 marks)
(b) Prepare a retained earnings statement. (2 marks)
Answer to Q2:
Porter Corporation
INCOME STATEMENT
For the Year Ended December 31, 2010
Sales
Cost of goods sold:
Merchandise inventory, Jan. 1
Purchases
Less purchase discounts
Net purchases
Merchandise available for sale
Less merchandise inv., Dec. 31
Cost of goods sold
Gross profit on sales
Operating expenses:
Selling expenses
General and administrative expenses
Total operating expenses
Operating income
Other revenue and expense:
Dividend revenue
Interest expense
Income before taxes
Income taxes
Income before extraordinary item
Extraordinary loss due to earthquake, net of
applicable taxes of $18,000
Net income
Per share of common stock—
Income before extraordinary item
Extraordinary loss, net of tax
Net income
$1,100,000
$152,000
$642,000
18,000
624,000
776,000
125,000
651,000
449,000
128,000
150,000
278,000
171,000
8,000
(17,000)
(9,000)
162,000
48,600
113,400
(42,000)
$ 71,400
$2.27
(.84)
$1.43
College of Administration and Financial Sciences
BPorter Corporation
RETAINED EARNINGS STATEMENT
For the Year Ended December 31, 2010
Retained earnings, January 1, 2010
Add: Net income
Deduct: Dividends declared
Retained earnings, December 31, 2010
$290,000
$71,400
29,000
42,400
$332,400
Question 3:
(4 Marks)
The following trial balance was taken from the books of ALHANA Company on December
31, 2022.
Account
Cash
Accounts Receivable
Note Receivable
Allowance for Doubtful Accounts
Merchandise Inventory
Prepaid Insurance
Furniture and Equipment
Accumulated Depreciation–F. & E.
Debit
SAR 12,000
40,000
7,000
Credit
SAR 1,800
44,000
4,800
125,000
15,000
College of Administration and Financial Sciences
Accounts Payable
Share Capital–Ordinary
Retained Earnings
Sales
Cost of Goods Sold
Salaries Expense
Rent Expense
Totals
10,800
44,000
55,000
280,000
111,000
50,000
12,800
SAR406,600
SAR406,600
At year-end, the following items have not yet been recorded.
a.
b.
c.
d.
e.
f.
Insurance expired during the year, SAR2,000.
Estimated bad debts, 1% of gross sales.
Depreciation on furniture and equipment, 10% per year.
Interest at 6% is receivable on the note for one full year.
Rent paid in advance at December 31, SAR5,400 (originally charged to expense).
Accrued salaries at December 31, SAR5,800.
Instructions
(a) Prepare the necessary adjusting entries. (2 marks)
(b) Prepare the necessary closing entries. (2 marks)
Answer to Q3: A
a. Insurance Expense
2,000
Unexpired Insurance
b. Bad Debt Expense
2800
Allowance for Doubtful Accounts
c. Depreciation Expense
Interest Revenue
2800
12,500
Accumulated Depreciation
d. Accrued Interest Receivable
2,000
12,500
420
420
College of Administration and Financial Sciences
e.
Prepaid Rent
5,400
Rent Expense
f. Salary Expense
Salaries payable
5,400
5,800
5,800
Answer to Q3: B
Closing Entries
Sales
Interest Revenue
Income Summary
Income Summary
Salaries Expense
Rent Expense
Depreciation Expense
Bad Debt Expense
Insurance Expense
Cost of Goods Sold
Income Summary
Retained Earnings
280,000
420
280,420
191,500
55,800
7,400
12,500
2,800
2,000
111,000
88,920
88,920
Question 4:
(3 Marks)
Prepare balance sheet in proper form for Golden Tulip hotel from the following list of
the accounts at November 30 2022:
Accounts receivable
Accounts payable
Building
Common stock
Cash
Notes payable
Office equipment
Retained earnings
Trucks
SAR10,000
18,000
28,000
30,000
8,000
45,000
12,000
?
55,000
College of Administration and Financial Sciences
Answer to Q4:
College of Administration and Financial Sciences
College of Administration and Financial Sciences
تاكدوا من االرقام
College of Administration and Financial Sciences
Assignment (1)
Deadline: Saturday 7/10/2023 @ 23:59
Course Name: Financial Accounting
Student’s Name:
Course Code: ACCT201
Student’s ID Number:
Semester: First Term 23/24
CRN: 10666
Academic Year: 1445 H
For Instructor’s Use only
Instructor’s Name: Dr. Fathimunisa Hanfy
Students’ Grade:
/15
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
• 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.
College of Administration and Financial Sciences
Assignment Question(s):
Question 1:
(Marks: 15)
(4 Marks)
List and discuss the characteristics of the International Accounting Standards Board
(IASB) that reinforced the importance of an open, transparent and independent process.
Answer to Q1:
Question 2:
(4 Marks)
Khaled Corporation’s capital structure consists of 50,000 ordinary shares. At December 31,
2022 an analysis of the accounts and discussions with company officials revealed the following
information:
Sales
Purchase discounts
Purchases
Loss on discontinued operations (net of tax)
Selling expenses
Cash
Accounts receivable
Share capital
Accumulated depreciation
Dividend revenue
Inventory, January 1, 2011
Inventory, December 31, 2011
Unearned service revenue
Accrued interest payable
Land
Patents
Retained earnings, January 1, 2011
Interest expense
SAR1,100,000
18,000
642,000
42,000
128,000
60,000
90,000
200,000
180,000
8,000
152,000
125,000
4,400
1,000
370,000
100,000
290,000
17,000
College of Administration and Financial Sciences
General and administrative expenses
Dividends declared
Allowance for doubtful accounts
Notes payable
Machinery and equipment
Materials and supplies
Accounts payable
150,000
29,000
5,000
200,000
450,000
40,000
60,000
The amount of income taxes applicable to ordinary income was SAR48,600, excluding the tax
effect of the discontinued operations loss, which amounted to SAR18,000.
Instructions
(a) Prepare an income statement. (2 marks)
(b) Prepare a retained earnings statement. (2 marks)
Answer to Q2:
College of Administration and Financial Sciences
Question 3:
(4 Marks)
The following trial balance was taken from the books of ALHANA Company on December
31, 2022.
Account
Cash
Accounts Receivable
Note Receivable
Allowance for Doubtful Accounts
Merchandise Inventory
Prepaid Insurance
Furniture and Equipment
Accumulated Depreciation–F. & E.
Accounts Payable
Share Capital–Ordinary
Retained Earnings
Sales
Cost of Goods Sold
Salaries Expense
Rent Expense
Totals
Debit
SAR 12,000
40,000
7,000
Credit
SAR 1,800
44,000
4,800
125,000
15,000
10,800
44,000
55,000
280,000
111,000
50,000
12,800
SAR406,600
SAR406,600
At year-end, the following items have not yet been recorded.
a.
b.
c.
d.
e.
f.
Insurance expired during the year, SAR2,000.
Estimated bad debts, 1% of gross sales.
Depreciation on furniture and equipment, 10% per year.
Interest at 6% is receivable on the note for one full year.
Rent paid in advance at December 31, SAR5,400 (originally charged to expense).
Accrued salaries at December 31, SAR5,800.
Instructions
(a) Prepare the necessary adjusting entries. (2 marks)
(b) Prepare the necessary closing entries. (2 marks)
Answer to Q3:
College of Administration and Financial Sciences
Question 4:
(3 Marks)
Prepare balance sheet in proper form for Golden Tulip hotel from the following list of
the accounts at November 30 2022:
Accounts receivable
Accounts payable
Building
Common stock
Cash
Notes payable
Office equipment
Retained earnings
Trucks
Answer to Q4:
SAR10,000
18,000
28,000
30,000
8,000
45,000
12,000
?
55,000
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