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AC 07 -2: Advanced Accounting Assignment

Learning Outcome 1: Explain accounting conventions and principles used while dealing with various financial aspects in preparation of financial statements of different types of organisations.

Learning Outcome 2: Apply generally accepted accounting principles to measure, report and analyse information related to business enterprises, governmental and not-for-profit entities

Assignment Problem 1:
Mazoon Corporation SAOG (Mazoon Corp) is a public listed Company which is listed on the Muscat Securities Market. Mazoon Corp specialises in manufacturing electronic products such as mobile phones, tablets and laptops. It is the end of the year 2019 and you have been newly appointed as the Chief Accountant of Mazoon Corp. You extract data from Mazoon's ERP system and pool together the following information. Mazoon has sold 5000 units of mobile phones at a price of Omani Rials 100, 2000 units of tablets at a price of Omani Rials 50 and 1000 units of laptops at a price of Omani Rials 300. There were no major customer complaints , other than one case of product returns by a customer for Omani Rials 2500. Most of the Companies inventory is sourced from China and the Company started the year with Opening Inventory of Omani Rials 15000. It purchased further inventory of Omani Rials 589000 through the year. Inventory of Omani Rials 5500 was damaged and returned to suppliers. Omani Rials 1000 was the freight charges and the year closed with some unsold stock.

A quick look at the companies ERP system revealed the following closing balances:

Premises	300000
Advertising	5000
Goodwill	100000
Travel expenses	4000
Sundry expenses	3000
Retained earnings	150000
Dividend Equalisation Reserve	15000
Salary	10000
Share Capital	250000
10 % loan for 5 years	50000
Auditor's fees	5000
Tools and Equipment	250000
Freight outward	6000
Cash at bank	50000
Computers	20000
Accounts Payable	10000
Accounts Receivable	20000

Further investigations revealed that some other details such as:

The final stock count revealed that closing Inventories included raw materials of Omani Rials 5000, finished goods of Omani Rials 4000 and work in progress of Omani Rials 1000. Customers of Omani Rials 500 were declared irrecoverable and the Board took a decision to write them off as a bad debt. Sundry expenses of next year paid in current year is Omani Rials 300. Salary for the month of December, Omani Rials 200 was not paid by the close of the year. The junior accountant had an error where he included Omani Rials 1000 preliminary expenses under Advertising expense. The interest on loan was not paid by the close of the year and you decided to create a provision for the same. A look at the income tax departments suggested depreciation percentages revealed that Computers were to be depreciated at @ 15% and Premises @ 10%. It was decided that Tools and Equipment were overvalued and were now to be revalued at Omani Rials 220000. As far as the allocation of profits went, the board of Directors proposed Dividends @ 8% and also approved a creation of Omani Rials 5000 General Reserve for the very first time.

As a qualified Accountant in compliance with requirements of the Capital Market Authority of Oman, prepare the Financial statements of Mazoon Corporation SAOG in Compliance with IAS 1.

Assignment Problem 2:
One of the newly appointed Directors has asked you for some clarifications relating to IAS 1. IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements, including how they should be structured and overriding concepts such as Going concern, Consistency, Prudence / Conservatism , Accruals principle and off-setting. Write a report discussing and explaining with examples the FIVE accounting concepts that are mandated by IAS 1.

Assignment Problem 3:
Study the financial statements of various companies listed on the Muscat Securities Market and select one listed company. For your chosen company, study the Financial statements and write a report of their compliance with IAS 1 evaluating whether they have been prepared covering the IAS 1 requirements for financial statements and their structure.

Assignment Problem 4:
The junior accountant informs you that some of the records relating to the non current assets of premises of previous years were deleted by error. You decide to incorporate these records to ensure an up to date record of all transactions. The deleted transactions related to purchase and sale of premises. On 1st September 2016, the company purchased premises costing Omani Rials 45000. On 1st March, 2017, the Company purchased further premises costing Omani Rials 20000. On 1st August, 2017 the Company purchased some more premises costing Omani Rials 10000. On 1st April 2018, one third (1/3) of the premises which was purchased on 1st September 2016 were sold for Omani Rials 6000. The Company follows straight line method for depreciation as mandated by IAS 16.
You prepare the necessary Accounts to record and update the above transactions

Assignment Problem 5:
Your company, Mazoon Corporation SAOG, has re-valued the non current asset of tools and equipment this year. The newly appointed Director is confused about the difference in the accounting treatment of revalued assets and assets recorded at original purchase price. He has requested for some clarifications in this matter. Write a report explaining to him Characteristics of depreciation and the difference between Cost vs Revaluation models for measurement after initial recognition as mandated by IAS 16 Property, Plant and Equipment.

Assignment Problem 6:
For the MSM listed company chosen by you, study the Financial statements and write a report of their compliance with IAS 16 evaluating the
1. Appropriateness of method of depreciation chosen.
2. Rates at which depreciation is charged for various classes of assets
3. Analyse the notes to Financial statements and particularly the Schedule of Non Current Assets. Discuss in detail aspects such as the different classes of Non Current Assets, their original cost, disposals /deletions, additions as well as accumulated depreciation and net book value of various classes of Non Current assets.

GUIDELINES:

Assignment Problem 1:

Prepare 3 financial statements of Mazoon Corp.
1. Statement of comprehensive income for the year ended December 31, 2019
2. Statement of Financial Position as at December 31, 2019.
3. Statement of Changes in Equity for the year ended 31st December 2019.

Assignment Problem 2:
Discuss 5 accounting concepts of IAS 1 WITH MINIMUM ONE DETAILED EXAMPLE EACH.
1. Going concern
2. Consistency
3. Prudence / Conservatism
4. Accruals principle and
5. Off-setting / Aggregation

Assignment Problem 3:
Select one listed company from Muscat Securities Market. Download FINANCIAL STATEMENTS FOR 2019
Discuss the importance of SOCI....WHY PREPARE?
1. Go to SOCI/ Income statement. Give your observations on the
• Structure,
• The number of years you have information for - why?
• The expenses,
• The other income,
• Profit before and after tax
Discuss the importance of SOFP....WHY PREPARE?
2. Go to SOFP/ Balance Sheet. Give your observations on the
• Structure,
• The number of years you have information for - why?
• NCA
• CA
• NCL
• CL
• EQUITY

Discuss the importance of SOCI....WHY PREPARE?
3. Go to SOCE/ Stockholders equity. Give your observations on the
• Structure,
• The number of years you have information for - why?
• The contents
Assignment Problem 4:
Prepare the necessary Accounts to record the deleted transactions
1. Premises Account
2. Accumulated Depreciation Account
3. Disposal Account,

Assignment Problem 5:

Write a report discussing
1. Characteristics of depreciation (7/8 well discussed)
2. Difference between Cost vs Revaluation models for measurement after initial recognition

Assignment Problem 6:
For the MSM listed company chosen by you, study the Financial statements and write a report of their compliance with IAS 16 evaluating the
1. Which method of depreciation has the company chosen.
2. Rates at which depreciation is charged for various classes of assets
3. Analyse the notes to Financial statements and particularly the Schedule of Non Current Assets. Discuss in detail aspects such as the different
• Non Current Assets,
• disposals /deletions 2019,
• additions 2019
• accumulated depreciation 2019
• Total net book value of various classes of Non Current assets at close of 2019

Attachment:- Advanced Accounting Assignment.rar