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Q1. Discuss with your own examples the two methods of accounting for account receivables with
cash discounts and the two methods for estimating bad debts.
(Note: Numerical Examples must include Journal entry)
Q2. X Company has the following receivables classified into individually significant and all
All other receivables
X company determines that P’s receivable is impaired by $20,000, and S’s receivable is totally
impaired. Both Q’s and R’s receivables are not considered impaired. X company also determines
that a composite rate of 2% is appropriate to measure impairment on all other receivables.
Required: Calculate the total impairment on accounts Receivable
Q3. Rex Company’s record of transactions for the month of September was as follows.
Total units (ending inventory) 350
Compute the ending inventory at September 30 on each of the following on periodic bases.
Q4. Explain the concept of LCNRV and its applicability to Agricultural Inventory and
Q5. Give numerical examples for Gross profit and retail Methods of Estimating ending Inventory.
Q6. ABC Corporation borrowed SAR 150,000 at 10% interest from NCB Bank on Jan. 1, 2020,
for specific purposes of constructing special-purpose equipment to be used in its operations.
Construction on the equipment began on Jan. 1, 2020, and other general debt existing on Jan. 1,
SAR 200,000, 12%, 10-year bonds payable
SAR 100,000, 11%, 5-year note payable
The weighted-average accumulated expenditures was SAR 250,000.
Compute the Actual and Avoidable Interest and Pass journal entry for the appropriate interest to
be capitalized. (2 Marks)
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