University of Technology and Applied Sciences (UTAS-HCT)

Department of Business Studies

Intermediate Accounting -1
Assignment – 15 marks
Student I.D no. : _____________________
Name of the student: ______________________________________________________

1. On 1st January 2015 Khalid LLC started a business of selling and buying

Cement products for constructing buildings around Muscat. The company has

brought few assets while starting the business namely cash balance RO 25000,

Bank balance RO 12500, short term investments RO 12,500. The company

was running successfully the cement products business and started earning

good profits and the company gradually improved their business during the

first four months also purchased a Vehicles 1st May 2015 RO 67,500 and

installation 12500 and life of the Vehicles is 5 years with scrap value of RO

20,000. The company has brought additional capital of RO 90000 in addition

to the regular profits and purchased a building for RO 95,000 on 1st June 2015.

The company had bought one Machinery on 1st September 2016 for RO

32,750 with the installation value of RO 12250 which has estimated life of 4

years with the estimated scrap value of RO 3000 and the machinery is

depreciated at 20% per annum on reducing balance method/written down

value method. The Company closes it books of account every year on 31 st

 December. You are required to prepare depreciation schedule for the

following non-current assets showing all the working notes

A. Vehicles for five years under Straight Line Method

B. Building for five years under straight line method

C. Machinery for Four years under Reducing balance method

2. On January 1, 2017, XYZ Company had Accounts Receivable $139,000, Notes

Receivable $25,000, and Allowance for Doubtful Accounts $13,200. The note
receivable is from QAQ Company. It is a 4-month, 9% note dated December 31,
2016. XYZ Company prepares financial statements annually at December 31.
During the year, the following selected transactions occurred:

Jan. 5 Sold $20,000 of merchandise to ABC Company, terms n/15.

Jan. 20 Accepted ABC Company’s $20,000, 3-month, 8% note for balance due.
Feb. 18 Sold $8,000 of merchandise to SALM Company and accepted SALM’s
$8,000, 6-month, 9% note for the amount due.
Apr. 20 Collected ABC Company note in full.
Apr. 30 Received payment in full from QAQ Company on the amount due.
May 25 Accepted HEL Inc.’s $6,000, 3-month, 7% note in settlement of a past-due
balance on account.
Aug. 18 Received payment in full from SALM Company on note due.
Aug. 25 The HEL Inc. note was dishonored. HEL Inc. is not bankrupt; future
payment is anticipated.
Sept. 1 Sold $12,000 of merchandise to STAN Company and accepted a $12,000,
6-month, 10% note for the amount due.
Instructions:Journalize the transactions.