Reference no: EM133496318

Assignment: Principles 0f Accounting

I. In June 30, 2023, ABC Company has the following information (Amounts in Saudi Riyal)

Bank statement indicated a balance of 100,000

The cash general ledger account on that date shows a balance of 120,000

The ABC's accountant provided Additional information necessary for preparing the ABC's reconciliation statement:

1. A 10,000 check sent to the bank for deposit but has not yet reached the bank at the statement date.
2. The bank returned a customer's NSF check for 26,000 received as payment on account receivable.
3. A 500 deposit by Z Company was erroneously credited to ABC account by the bank.
4. The bank statement showed 500 interest earned during June.
5. Outstanding checks totalled 15,000.

Task

1. Prepare a June 30 bank reconciliation statement for ABC Company.
2. Prepare adjusting entries

II. On July 31, ABC Company discovered that it cannot collect SAR 5,000from Za credit customer.

Task: Pass journal entries to record bad debt expense using both Direct Write-Off Method and Allowance Method.

III. On January 1, 2022, equipment was purchased for SAR 1000,000 cash. The equipment useful life is 10 years and has an estimated salvage value of SAR 50,000,000.

Task

1. Compute the annual depreciation expense for year 2022 using straight line method and Declining Balance Method.
2. Pass journal entries to record the annual depreciation using straight line method and Declining Balance Method.

IV. On July 1, 2022, an airline company received an amount of SAR100,000 for international flights that will take off on December 30, 2022.

Task

1. Prepare journal entries On July 1, 2022
2. Prepare journal entries on December 30, 2022 assuming that the airline provided the service to customers.

V. Define and Discuss the Accounting Treatment for Contingent Liabilities.