ACCT 302 SEU Advanced Financial Accounting Worksheet


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College of Administrative and Financial Sciences
Assignment 1
Deadline: 5-3-2022 at 23.59 pm
Course Name: Management Accounting
Student’s Name:
Course Code: ACCT 302
Student’s ID Number:
Semester 2
Academic Year: 1442/1443 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade: Marks Obtained /Out of
Level of Marks: High-Middle-Low
10 marks

The Assignment must be submitted on Blackboard (WORD format only) via allocated

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.
Page 1 of 3
Assignment Question(s):
(10.0 Marks)
1. Assume X Corp creates a subsidiary, Y Corp, and invests $500,000 cash in exchange for all
of the $1 par common stock (2,000 shares). (2.5 marks)
What would journal entries X and Y make at the time of the investment?
2. X Corporation created Y Corporation with a transfer of $1,000 cash. During Y Corp.’s first
year of operations, it generated a net loss of $50 and paid no dividends. During Y Corp.’s
second year of operations, it generated net income of $100 and paid cash dividends of $30.
(2.5 marks)
A. Pass journal entries in the books of X corp. in year 1 and year 2 using equity method.
B. What is the balance of investment account at the end of year 2 using equity method?
C. Pass journal entries in the books of X corp. in year 1 and year 2 using cost Method.
D. What is the balance of investment account at the end of year 2 using cost method?
Page 2 of 3
3. X Corp. Acquired 100% of common stock of Y Corp. Paying $ 2 Million in return for 50
Thousand common stock with $ 1 par value. Y Corp. realized $100 Thousand net income
and paid $30 Thousand cash dividends. (2.5 marks)
Required: pass basic elimination entries in consolidation work sheet.
4. X Corp. Acquired 100% of common stock of Y Corp. X Corp. assumed acquisition
expenses as follows (amounts in $)(2.5 marks)
Legal fees
Accounting fees
Travel expenses
Legal fees (stock issue)
Accounting fees (stock)
SEC filing fees (stock)
Prior to the acquisition date, $90,000 have been paid and capitalized to a deferred charges account
on the balance sheet. The remaining $45,000 has not been paid or accrued.
Prepare the journal entry to record the acquisition expenses.
Page 3 of 3

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