FINANCIAL ACCOUNTING
ACCT 201
ASSIGNMENT 2
Q1. Explain the statement of financial position and its uses and limitations.(2 marks)
Q2. X Company has the following receivables classified into individually significant and all other receivables.
| Individually significant P Company Q Company R Company S Company All other receivables | $ 65,000 95,000 75,000 35,000 |
270,000 425,000 |
| Total receivables. | 695,000 |
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. (2 marks)
Q3. Calculate cash flow from operating activities from the following data:( 3 marks)
- Profits made during the year $ 145,000 after considering the following items :
Amortization of Goodwill 3,000
Depreciation of Fixed Assets 17,000
Loss on Sale of Fixed Assets 2,500
Transfer to General Reserve 15,000
The following is the position of current assets and current liabilities:
| Particulars | 31.3.07 | 31.3.08 |
| Creditors Debtors Prepaid Expenses Bills Payable | 12,000 16,200 250 5,000 | 8,200 12,000 750 7,000 |
Q4. CHO Company was formed on December 1, 2009. The following information is available from Jones’s inventory record for Product X.
Units Unit Cost
January 1, 2010 (beginning inventory) 1,600 $18.00
Purchases:
January 5, 2010 2,600 $20.00
January 25, 2010 2,400 $21.00
February 16, 2010 1,000 $22.00
March 15, 2010 1,800 $23.00
A physical inventory on March 31, 2010, shows 2,500 units on hand.
Prepare schedules to compute the ending inventory at March 31, 2010, using Weighted-average. ( 3 marks)