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    BACC 416 Assignment 1 - Questions

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    BACC 416 Assignment 1 - Questions

    Uploaded by

    neda
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    BACC 416 Assignment 1_Questions[1]

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    22 views6 pages

    BACC 416 Assignment 1 - Questions

    Uploaded by

    neda

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    © All Rights Reserved
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    of 6

    Assessment Instrument Cover Sheet

    Course Code: BACC 416 Course Title: International Accounting

    Semester: SPRING Academic Year: 2023 – 2024

    Assessment Instrument: Mid-Term Exam Date: March 20, 2024

    Course Instructor: Parizad Phiroze Dungore .

    College/Department: DBS / Finance, Accounting and Economics .

    This instrument assesses the following Course Learning Outcomes (CLO):

    Tick Course Learning Outcomes (CLO)* Marks


    X (CLO 1) Comprehend the main differences in accounting practices around the /6
    world, their causes and problems, and how to deal with such diversity
    through harmonization and convergence
    X (CLO 2) Apply International Financial Reporting Standards (IFRS) to different /7
    asset items and compare their results with GAAP
    X (CLO 3) Describe the International Financial Reporting Standards (IFRS) 0f /7
    liability and equity items and how to reconcile their results with GAAP
    Total from 20 /20
    *Linkages to Program Outcomes and Concentration Outcomes are provided in the Syllabus.

    Student Name: .......................................................................................

    Student ID No: .......................................................................................


    Question 1 (6 Marks)
    Case 1 ( 1 Mark) Define and provide a brief description of the 4 major reasons companies might want to
    invest overseas? (Foreign Direct investment).
    Answer

    Case 2 (1 Mark) What are the advantages of having a single set of financial reporting standards used
    worldwide?
    Answer

    Case 3 (2 Marks) Describe 4 major accounting differences that exist across countries.
    Answer
    Case 4 (2 Marks) Define four (4) types of differences that exist between IFRS and USA GAAP.

    Question 2 (7 Marks)

    Case 1 (4 marks) Beech Corporation – Inventory (reversal of write-down)


    Beach Corporation has three products that it still has in inventory at December 31, Year 2. The table below
    provides the information about each product.

    Selling Selling
    Carrying price costs NRV LCNRV
    Product Amount Cost 12/31/Y2 (5%) 12/31/Y2 12/31/Y2
    101 130 $130 $190
    202 133 $160 $160
    303 66.5 $100 $130
    Item-by-item total $329.5 $390

    Required

    Complete the table and determine the amount at which the Beech Company should report its inventory on its
    December 31 Year2 balance sheet. (3 marks)

    Write the journal entry for reversal. (1 mark)

    Answer
    Journal entry

    Inventory valuation allowance $52.50


    Reversal of inventory write-down expense $52.50

    Case 2 (3 marks)
    XYZ Entity is in the process of knocking down its existing facilities to redevelop its business. In the process
    the company will relocate temporarily to another site.
    Following expenses are expected to be incurred:
    Set up costs of Rs.5,00,000 to install machinery in the new location
    Rent Rs.15,00,000
    Removal charges of Rs. 3,00,00 to remove the machinery from the old location to the new location.
    Can these costs be capitalized into the costs of the new building?

    Answer:

    Question 3 (7 marks)

    Case 1 (2 marks)
    Phil’s Sandwich Company sells sandwiches at various locations in the Northeastern part of the
    country. Phil’s customers receive a card on their first visit that allows them to receive one free
    sandwich for every eight sandwiches purchased in a three-month period. Customers must redeem
    their cards in the month after the 3-month period is completed.Each time a customer purchases a
    sandwich his or her card is stamped. Past experience shows that only 50% of the customers
    accumulate enough stamps within a three-month period to qualify for a free sandwich and only
    80% of these customers actually redeem their card to receive a free sandwich.
    In the first quarter of the current year Phil’s sold 12,000 sandwiches at an average price of $7.
    Phil’s only accepts payment in cash.

    Required:

    Prepare the summary journal entry Phil’s should make to recognize revenue from the sale of
    sandwiches for the first quarter of the current year. (1 marks)

    The journal entry to recognize revenue from sandwich sales in the first quarter of Year 1 (1 mark)
    Answer

    Case 2 (5 marks)
    Lowa farm machinery dealer in the first year of operation had installment sales for 600000 and a
    cost of goods sold on installment of 420000, the collection on the installment were as follows:

    2001 $280000
    2002 200000
    2003 120000
    total 600000
    Required: Using the installment method
    1-Compute the gross profit (0.5 marks)
    2- Compute the gross profit percent (0.5 marks)
    3- Compute the gross profit realized (recognition) for the year 2001,2002 and 2003 (1 mark)
    4- Prepare journal entries to record the sale, collection, and recognition of gross profit for 2001,
    2002 and 2003. (3 marks)

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