BACC 416 Assignment 1 - Questions
BACC 416 Assignment 1 - Questions
BACC 416 Assignment 1 - Questions
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)
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)
Answer
Journal entry
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)