Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. The partnership of Ibrahim and Rawan have the following provisions: (3.0 marks) - Ibrahim and Rawan receive yearly salary allowances of SAR 30,000 and

3. The partnership of Ibrahim and Rawan have the following provisions: (3.0 marks)

- Ibrahim and Rawan receive yearly salary allowances of SAR 30,000 and SAR 20,000, respectively.

-Interest is rate of 6 % on the average capital investment.

-Any remaining profit or loss is shared between Ibrahim and Rawan at a ratio of 2:1 ratio, respectively.

-Average Capital investments: Ibrahim SAR 100,000; Rawan, 50,000

Required:

  1. Prepare a schedule showing the distribution of the profit between the two partners assuming the partnership profit SAR 200,000.
  2. Pass journal entries to allocate the profit to the partners.

Answer:

Exchange rates:

Date

Exchange rates

January 1, 2021

15.50

Oct. 1 2021

15.60

December 1, 2021

16.50

Feb. 1 2021

17.00

December 31, 2021

17.20

Average

16.36

Required:

Prepare a schedule to translate Subsidiarys financial statements on 31/12/2021 to U.S. dollars using current rate method.

3. The partnership of Ibrahim and Rawan have the following provisions: (3.0 marks)

- Ibrahim and Rawan receive yearly salary allowances of SAR 30,000 and SAR 20,000, respectively.

-Interest is rate of 6 % on the average capital investment.

-Any remaining profit or loss is shared between Ibrahim and Rawan at a ratio of 2:1 ratio, respectively.

-Average Capital investments: Ibrahim SAR 100,000; Rawan, 50,000

Required:

  1. Prepare a schedule showing the distribution of the profit between the two partners assuming the partnership profit SAR 200,000.
  2. Pass journal entries to allocate the profit to the partners.

Answer:

1.On October 1, 2021, a manufacturing company in Egypt imported raw materials of 100,000 $ from the United States by letter of credit and it will pay for the raw materials after 6 months against promissory note. (4.0 marks)

Exchange rates of Egyptian pound against US $ were as follows:

October 1, 2021 15.70

December 31, 2021 15.60

March 31, 2022 18.5

Required:

a. Pass journal entries to record purchasing raw materials.

b. Pass journal entries to record the impact of change in exchange rates at the end of the year.

c. journal entries to record payment of liabilities on March 31, 2022.

Answer:

2. On January 1, 2021 a parent company based in US acquired a subsidiary in Egypt and the following information is extracted from the subsidiary books for 2021: (3.0 marks)

Inventory purchased on Oct. 1 2021.

Purchases of inventory have been made throughout the year.

Uses straight-line depreciation on fixed assets.

Dividends declared and paid on December 1, 2021

Fixed assets have been purchased on Feb. 1, 2021.

Adjusted trail balance as of 31/12/2021 as follows:

Account title

Amount in Egyptian pound

Cash

2,000,000

Accounts receivable

2,000,000

Inventory

5,000,000

Notes receivable

1,000,000

Plant assets

10,000,000

dividends

200,000

Cost of goods sold

7,000,000

Depreciation expense

200,000

Other expenses

500,000

Total debits

25,900,000

Sales

10,000,000

Accumulated depreciation

200,000

Accounts payable

3,000,000

Notes payable

1,000,000

Common stocks

9,600,000

Retained earnings

2,100,000

Total credits

25,900,000

Exchange rates:

Date

Exchange rates

January 1, 2021

15.50

Oct. 1 2021

15.60

December 1, 2021

16.50

Feb. 1 2021

17.00

December 31, 2021

17.20

Average

16.36

Required:

Prepare a schedule to translate Subsidiarys financial statements on 31/12/2021 to U.S. dollars using current rate method.

3. The partnership of Ibrahim and Rawan have the following provisions: (3.0 marks)

- Ibrahim and Rawan receive yearly salary allowances of SAR 30,000 and SAR 20,000, respectively.

-Interest is rate of 6 % on the average capital investment.

-Any remaining profit or loss is shared between Ibrahim and Rawan at a ratio of 2:1 ratio, respectively.

-Average Capital investments: Ibrahim SAR 100,000; Rawan, 50,000

Required:

  1. Prepare a schedule showing the distribution of the profit between the two partners assuming the partnership profit SAR 200,000.
  2. Pass journal entries to allocate the profit to the partners.

Answer:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Control Anti Fraud Program Design For The Small Business

Authors: Steve Dawson

1st Edition

1119065070, 978-1119065074

More Books

Students also viewed these Accounting questions

Question

3. Identify challenges to good listening and their remedies

Answered: 1 week ago

Question

4. Identify ethical factors in the listening process

Answered: 1 week ago