# Financial Accounting2

Assignment Question(s): Total Marks 10 Chapter 7 to 10

Q1. Discuss with your own examples the two methods of accounting for account receivableswith cash discounts and the two methods for estimating bad debts. (2 Marks)

(Note: Numerical Examples must include Journal entry)

Q2. X Company has the following receivables classified into individually significant and all other receivables.

 Individually significant P Company Q Company R Company S Company All other receivables \$ 65,000 95,000 75,000 35,000 270,000 425,000 Total receivables. 695,000

X company determines that P’s receivable is impaired by \$20,000, and S’s receivable is totally impaired. Both Q’s and R’s receivables are not considered impaired. X company also determines that a composite rate of 2% is appropriate to measure impairment on all other receivables.

Required: Calculate the total impairment on accounts Receivable (1 Mark)

Q3. Rex Company’s record of transactions for the month of September was as follows.

 Purchase Sales Date Quantity Unit Price Date Units Sep 1 (Balance on hand) 100 \$5.00 Sep 5 300 Sep 4 400 5.10 Sep 12 200 Sep 11 300 5.30 Sep 27 800 Sep 18 200 5.35 Sep 28 150 Sep 26 600 5.60 Sep 30 200 5.80 Total 1,800 1,450 Total units (ending inventory) 350

Instructions: (2 Marks)

Compute the ending inventory at September 30 on each of the following on periodic bases.

1. FIFO

2. LIFO

3. WA

Q4. Explain the concept of LCNRV and its applicability to Agricultural Inventory and