Question One: Below are the revenue and expense data for Alrowdah Co$.$:

Received a total of $105,000$ SAR from customers in $2016(25,000$ SAR was earned in $2015).$

Also, earned $40,000$ SAR of revenue in $2016,$ which will not be received until $2017.$

Paid $72,000$ SAR for expenses in $2016(30,000$ SAR was for expenses incurred in $2015).$ Also,

incurred $42,000$ SAR of expenses in $2016,$ which will not be paid until $2017.$

Instructions:

Calculate $2016$ net income using Cash$-$basis method.

Calculate $2016$ net income using Accrual$-$basis method.

Question Two: Fisal established Faisal Financial Services Co$.$ on January $1^{st},2023.$ The company

prepares financial statements quarterly. Below is the Trail Balance on March $31,2023$:

Faisal Financial Services Co$.$

Trail Balance

March $31,2023$ Other data:

After an inventory count, office supplies on hand are $2,000$ SAR.

After a physical count, Advertising supplies used is $1,600$ SAR.

Notes Receivable issued on January $1,2023,$ with $10\%$ interest rate. Collectable in $2025.$

Insurance is for one year ending December $31,2023.$

Prepaid rent is for three years ending December $31,2025.$

Equipment is purchased on January $1,2023,$ with no salvage value and $5$ years useful life.

The building is acquired on January $1,2023,$ with no salvage value and $10$ years useful life.

The Notes Payable issued on January $1,2023,$ with $12\%$ interest.

$2,700$ SAR of unearned service revenue is earned by March $31,2023.$

After an analysis of unearned rent revenue, $11,100$ SAR is still unearned.

Incurred $700$ SAR utilities expense which is not yet paid in cash or recorded.

Performed $1,200$ SAR worth of consulting services to a client in March $2023.$ However, no

journal entry is recorded, and client is not billed yet.

$1,400$ SAR of salaries are incurred in March $31,2023,$ and the pay day is on April $20,2023.$

Instructions:

a$)$ Journalize the adjusting entries for the quarter ending March $31,2023.$

b$)$ Post adjustments to general ledger.

c$)$ Prepare the adjusted trail balance on March $31,2023.$

d$)$ Prepare the financial statements for the quarter ending March $31,2023.$ Question Three: Presented below is Ali Co$.$ trail balance and necessary adjustments needed:

Ali Co$.$

Trail Balance

December $31,2023$

Adjustments necessary for the quarter ended December $31,2023$:

Supplies consumed are $7,600$ SAR.

Insurance expired is $1,200$SAR.

Equipment depreciation is $2,500$SAR.

Buildings depreciation is $2,400$ SAR.

Earned $5,400$ SAR of unearned service revenue.

Incurred $1,400$ SAR utilities expense payable in $2024.$

Services performed to a client $2,400$ SAR collectable in $2024.$

Incurred $2,800$ SAR of salaries payable in $2024.$

Instructions:

a$)$ Prepare and complete Ali Co$.$ Worksheet.

b$)$ Prepare Ali Co$.$ Financial Statements. Instructions:

a$)$ Journalize closing entries for the fiscal year ended $31/12/2023.$

b$)$ Post closing entries to ledger.

c$)$ Prepare post$-$closing trail balance for the fiscal year ended $31/12/2023.$Question Five: The following errors were discovered in Galaxy Co$.$ books on $31/12/2023$:

Purchased office supplies on account for $700$ SAR. The accountant incorrectly recorded the

transaction as: $[$Dr$.$ Office Supplies $1,700/$ Cr$.$ Accounts Payable $1,700].$

Purchased Advertising Supplies and paid $1,500$ SAR. The accountant incorrectly recorded the

transaction as: $[$Dr$.$ Adv. Supplies $500/$ Cr$.$ Cash $500].$

An adjustment to unearned service revenue to recognize $2,000$ SAR as earned revenue. The

accountant incorrectly recorded the transaction as: $[$Dr$.$ Service Revenue $2,000/$ Cr$.$

Unearned Service Revenue $2,000].$

Performed a service to a client on account for $5,000$ SAR. The accountant incorrectly

recorded the transaction as: $[$Dr$.$ Cash $5,000/$ Cr$.$ Service Revenue $5,000].$

Purchased equipment for $3,000$ SAR; paid $1,000$ SAR and the remainder on credit. The

accountant incorrectly recorded the transaction as: $[$Dr$.$ Equipment $3,000/$ Cr$.$ Cash $3,000].$

Purchased Equipment costing $10,000$ SAR; Paid $4,000$ SAR and the remainder on account.

The accountant incorrectly recorded the transaction as: $[$Dr$.$ Equipment $100,000/$ Cr$.$ Cash

$40,000$&$Cr.$ Accounts Receivable $60,000].$

Instructions: For each error, analyze the error and journalize the Correcting Entry. $($Analyze the

Correct & Incorrect entries to reach the Correcting Entry$).$