Below is the case study for the understanding of suggested Ijarah accounting: The ijarah rent is received on monthly basis. Example Amount in Rs./% Asset Price 2000 Riyals Monthly rentals 60 Riyals Tenure Security Deposit 100 Delivery time I month Purchase date of the weet 1-1-2016 Useful life of the asset 12 months Residual value of the asset 100 Riyals Pass the necessary journal entries on the date of purchase, delivery to the lessee, and for the receipt of the rent income for the first three months. Also pass the journal entry at the end of the useful life of the asset, considering that the asset is sold at 1000 Riyals after its useful life. 1) XYZ company is planning to build a hotel, the company has three alternatives: to build large, medium, or small hotel. The company decided that the profitability will be affected the level of the future demand. The company considered only two demand possibilities, strong or weak demand. The company expects that $8 million net profit will be generated if company built a small hotel and demand turns out to be strong, if the demand turns out to be weak the profit is expected to be 7 million. A medium hotel will result in a net profit of 14 million in a strong demand, in weak demand it is expected to generate 5 million. A large hotel will result in 20 million profit in strong demand but a net loss of 9 million will occur if the demand is weak. Suppose that the XYZ management believe that the probability of strong demand is (-8) and the probability of weak demand is (-2). Find the expected value of each alternative? Which alternative will they choose? 2) Suppose that you enter a drawing by obtaining one of 20 tickets that have been distributed. What is the probability of your winning the drawing. Given the following distribution: Value of Outcome Random Variable Probability A 1 4 B 2 3 3 2 D 4 1 What is the expected value? What is the variance? show your work 4. The number of defects that occur per unit of product follows a Poisson distribution (binomial) with a mean of 4 defects per unit. What is the standard deviation of this distribution? In a given office, the color printer breaks down with a probability of 20% in any month. A binomial process is assumed for a period of 10 months. What is the probability that the printer breaks down exactly 2 times? Below is the case study for the understanding of suggested Ijarah accounting: The ijarah rent is received on monthly basis. Example Amount in Rs./% Asset Price 2000 Riyals Monthly rentals 60 Riyals Tenure Security Deposit 100 Delivery time I month Purchase date of the weet 1-1-2016 Useful life of the asset 12 months Residual value of the asset 100 Riyals Pass the necessary journal entries on the date of purchase, delivery to the lessee, and for the receipt of the rent income for the first three months. Also pass the journal entry at the end of the useful life of the asset, considering that the asset is sold at 1000 Riyals after its useful life. 1) XYZ company is planning to build a hotel, the company has three alternatives: to build large, medium, or small hotel. The company decided that the profitability will be affected the level of the future demand. The company considered only two demand possibilities, strong or weak demand. The company expects that $8 million net profit will be generated if company built a small hotel and demand turns out to be strong, if the demand turns out to be weak the profit is expected to be 7 million. A medium hotel will result in a net profit of 14 million in a strong demand, in weak demand it is expected to generate 5 million. A large hotel will result in 20 million profit in strong demand but a net loss of 9 million will occur if the demand is weak. Suppose that the XYZ management believe that the probability of strong demand is (-8) and the probability of weak demand is (-2). Find the expected value of each alternative? Which alternative will they choose? 2) Suppose that you enter a drawing by obtaining one of 20 tickets that have been distributed. What is the probability of your winning the drawing. Given the following distribution: Value of Outcome Random Variable Probability A 1 4 B 2 3 3 2 D 4 1 What is the expected value? What is the variance? show your work 4. The number of defects that occur per unit of product follows a Poisson distribution (binomial) with a mean of 4 defects per unit. What is the standard deviation of this distribution? In a given office, the color printer breaks down with a probability of 20% in any month. A binomial process is assumed for a period of 10 months. What is the probability that the printer breaks down exactly 2 times
