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
CRN:
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
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 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?
Answer:
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)
Required:
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?
Answer:
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.
Answer:
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
50,000
Accounting fees
30,000
Travel expenses
10,000
Legal fees (stock issue)
Accounting fees (stock)
SEC filing fees (stock)
20,000
15,000
10,000
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.
Required:
Prepare the journal entry to record the acquisition expenses.
Answer:
Page 3 of 3

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Tags:
business

accounting

finance

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