American University of Ras Al Khaimah

School of Business
Accounting and Finance Department  
Program: B.Sc. In Accounting
Principles of Financial Accounting (ACCT 204) Fall 2020
Assignment (15 Marks)
Presentation (5 Marks)

Introduction: 
This course introduces the principles of financial accounting and begins with basic double entry
concepts, classification of accounts. It deals with the accounting cycle stages, identifying and
measuring of financial transactions, recording of financial transactions in the general journal, and
posting of journal entries in to the general ledger, preparation of adjusted trial balance,
preparation of financial statements at the end of financial period. An emphasis is on the sole
proprietorship, including both service and merchandising operations.
This assignment is based on student’s own research. This will be team-based effort. Students
are required to form groups to complete a written end-of semester team report. Each team
will select one well-known publicly traded company, which is traded on
UAE Stock Exchanges (www.nasdaqdubai.com)or(www.adx.ae) or (www.dfm.ae), and
answer the following questions, below, by applying the skills and techniques students learn
from this course, as stated above. The students are expected to make a group presentations
(each group is required to make a presentation) on their assignments in order evaluate their
involvement in the assignment, level of understanding of the concepts and their applications in
real work situations. This assignment carries 20% of weightage in overall grade (5 marks are
assigned to student’s presentation). 
 
Objectives: 
The primary objective of assignment is to make students develop their analytical abilities and
develop the research habits. The other objectives are to harness their creativity, critical thinking
ability and report writing ability and also develop the team work.  This is the opportunity to
students to relate critically what they learned from the class with the real world situations.  This
assignment will pull all essential concepts in principles of financial accounting together into a
practical format.  The efforts on the assignment will in the end provide students with confidence
to apply tools of preparing financial statements. The assignment is all about going into the depths
of the subject to be reviewed and discussing it objectively so that students get to know the
subject better and in details. The assignment develops students’ critical reasoning skills by
requiring that students identify issues which would be particularly important to understand the
principles of financial accounting. In addition, the assignment develops students’ communication
skills by requiring students to prepare concise written reports and to make oral presentations
detailing and defending their analyses and conclusions. Finally, when used as a group
assignment, the assignment also develops students’ understanding of group dynamics by
requiring students to reflect on the group processes followed in completing the assignment. 
 
Step -1

You have to choose any one business organization from the Websites of
UAE Stock Exchanges (www.nasdaqdubai.com) or (www.adx.ae) or (www.dfm.ae). Then get its
published financial statement for the financial period 2016. (Attach the copy of the financial
statement along with your completed assignment). The company selected by the one group
should not be repeated by another group in the class.

Step -2

From those statements you have to answer the following questions:  

1-      Brief introduction about the company? (2 Marks)
Company Name: National Marine No. of Employees: 4,418 employees
Dredging Company (NMDC)
Established: 1976 No. of Emirati Employees: 1,325
employees
Principle activities: Perform drilling No. of Non - Emirati Employees: 3,093
operation within the bottom of coastal employees
seas, dredging and withdrawing the
soil or extracting out and Dredging
and associated land reclamation
works, civil engineering, port
contracting and marine construction.
Branches: National Marine Dredging Head office Location: Abu Dhabi -
Company (NMDC) Branches at Saudi United Arab Emirates
Arabia and Egypt
 
2- List various items appear under the following categories: (5 Marks)
a- Assets
Non-current assets
Property, plant and equipment
Goodwill and other intangible assets
Retention receivables
Current assets
Inventories
Trade and other receivables
Available-for-sale financial assets
Financial assets at fair value through profit or loss
Cash and bank balances
b- Liabilities
Non-current liabilities
Bank borrowings
Provision for employees’ end of service benefits
 Current liabilities
Bank borrowings
Advances from customers
Provisions
Trade and other payables
Dividends payable
c- Owners' Equity
Share capital
Share premium
Additional share capital Reserves
Retained earnings
Proposed dividend
d- Revenues
Contract revenue
e- Expenses
Contract costs
General and administrative expenses
Reversal/(provision) of liquidated damages, net
Reversal of provision/(provision) for future losses, net
Provision for impairment of financial assets
Reversal/(allowance) for slow moving and obsolete inventories
Foreign currency exchange (loss)/gain
Provision for warranty and project discounts
Finance income/(expense), net
 
3-       What is net income AED of the company during 2016? Provide calculation (1 Mark).

 The Net Income of the company is 56,668,000 AED

Contract revenues 1,224,827,000
Contract Costs (1,124,868,000)
Gross profit 99,959,000
Operating Expenses
Other income 17,728,000
General and administrative expenses (93,230,000)
Reversal/(provision) of liquidated damages, net 12,862,000
Reversal of provision/(provision) for future losses, net 16,075,000
Provision for impairment of financial assets (1,030,000)
Reversal for slow moving & obsolete inventories 4,021,000
Foreign currency exchange (loss)/gain (4,279,000)
Provision for warranty and project discounts (3,102,000)
Finance income/(expense), net 7,664,000
Total Operating Expenses (43,291,000)
Net Income 56,668,000
4-       A company’s net income appears directly on the income statement and the owner’s equity
statements, and it is included indirectly in the company’s balance sheet. Do you agree?
Explain how net income is shown in Balance Sheet. (1 Mark) 
 
Yes, In the balance sheet, the net income appears indirectly because it is directly appearing in
the owner’s equity statements and the owner’s equity statements ending balance is directly
appears in the balance sheet. So, the effect of net income has indirectly appeared in the
balance sheet.

5-      What is a total assets value of the company at the end of 2016? Provide calculation (1 Mark)

The total asset value of the company at the end of the year 2016 is 4,386,013,000 AED
ASSETS
Non-current assets
Property, plant and equipment 1,118,357
Goodwill and other intangible assets 51,397
Retention receivables 63,511
Total non-current assets 1,233,265
Current assets
Inventories 235,194
Trade and other receivables 2,742,822
Available-for-sale financial assets 8,796
Financial assets at fair value through profit or loss 28,713
Cash and bank balances 137,223
Total current assets 3,152,748
Total assets 4,386,013
 
6-      What is a total Liabilities value of the company at the end of 2016? Provide calculation (1
Mark)

The total liabilities value of the company at the end of the year 2016 is 1,025,979,000 AED
Non-current liabilities
Bank borrowings -
Provision for employees’ end of service benefits 73,286
Total non-current liabilities 73,286
Current liabilities
Bank borrowings -
Advances from customers 119,588
Provisions 40,666
Trade and other payables 759,160
Dividends payable 33,279
Total current liabilities 952,693
Total liabilities 1,025,979

7-      What is a total Owner’s Equity value of the company at the end of 2016? Provide calculation
(1 Mark)
 The total Owner’s Equity value of the company at the end of the year 2016 is 3,360,034,000
AED
Capital and reserves
Share capital 250,000
Share premium 341,500
Reserves 743,405
Retained earnings 1,987,629
Proposed dividend 37,500
Total equity 3,360,034
 
8-      What is the accounting period of the company? (1 Mark)

The Accounting Period of the Company is 1st January, 2016 to 31st December 2016
 
9-      Which method the company uses in inventory costing? (periodic or perpetual) 
          (1 Mark)

The company uses the Perpetual method in inventory costing.

10-  Which method the company uses to compute depreciation for Plant Assets? 
(1 Mark)
 
 The Company uses the IAS 16 method to compute the depreciation for Plant Assets which
states that the depreciable amount (cost less residual value) should be allocated on a
systematic basis over the asset's useful life.
 
Submission Deadline: 
 
The assignment should be submitted to the Course Instructor on or before the deadline as
indicated in the course outline. Late submissions will be penalized by 5% per day.