Inventory is considered one of the most important elements of current assets because it is involved in knowing the outcome of the project$$s work, as the cost of sales cannot be determined except by determining the cost of the inventory at the beginning and end of the period. There are four ways to determine the cost of inventory.

Required :

$1-$ Explain these four methods and give a practical example that illustrates the method of calculating the cost of inventory at the end of the period

$2-$ Determine the cost of goods sold according to the previous methods

$3-$ Explaining the impact of using these methods on the income statement

second question: $.............................................................................(30$ marks$)$

When selling on credit, the company has debts to others, and these debts are often not collected in full. Therefore, an allowance is created for those doubtful debts, where the value of doubtful debts is estimated based on the forward sales method or the receivables balance method.

Required:

$1-$ Explain each of the previous two methods with a practical example and prove the necessary limitations for each method

$2-$ Statement of the impact of daily entries for doubtful debts on the financial statements

The third question: $.............................................................................(40$ marks$)$

The primary goal of depreciation is based on distributing the cost of the fixed asset over its useful life, as the asset is used for several financial periods. Therefore, the cost of the asset must be distributed over those periods in which that asset was used, in line with the principle of matching revenues with expenses.

Required:

There are several ways to distribute the cost of a fixed asset over the years that make up its useful life, and these methods are generally accepted: Give a practical example of each method $(4$ methods$)$ of these methods, finding the following:

$1-$ The amount of the annual depreciation installment

$2-$ Accumulated depreciation for three years

$3-$ The book value of the asset for three years

$4-$ Recording depreciation entries for three years

$5-$ Statement of the effect of depreciation on the income statement and the statement of financial position for three years