Act241 Week 3 Assignment 1
Effat University
Assignment 1
Fall 2014
DEPARTMENT: FINANCE
INSTRUCTOR: DR. FALEEL JAMALDEEN
COURSE:
ACT 240 MANAGERIAL ACCOUNTING
STUDENT NAME:
STUDENT I.D.:
Part
Total Marks
Part 1
20
Part 2
40
Part 3
40
TOTAL
100
Marks Obtained
Instructions
1. All the answers need to be submitted hand written as hard copy.
2. The last date for submission of the assignment is 15th October 2014
3. If the assignment was found plagiarized or copied from another sources you will lose 10 marks)
Total grade 10
Answer all the questions
Part I
Question 1 (5 Marks)
M. Carson and R. Leno have partnership capital balances of $ 40,000 and $ 80,000 respectively. The partnership agreement indicates that net income or net loss should be shared equally. If …show more content…
net income for the partnership is $ 36,000, how the net income should be divided. How much income each partner will get? Question 2 (5 Marks)
SDTM Co. reports net income of $ 55,000. Partner salary allowances are Sweet $ 15,000, Drinian $ 5,000,
Tavros $ 5,000 and Martin $ 2,000. Indicate the net income of each partner assuming if the S and T share
50% of profit equally and the rest of the partner’s share 3:2 respectively.
Question 3 (10 Marks)
Martha and Jones have capital balances of January 1 of $ 50,000 and $ 40,000 respectively. The partnership income-sharing agreement provides for (1) annual salaries of $ 20,000 for Martha $ 12,000 for
Jones, (2) interest at 10% on beginning capital balances and (3) remaining income or loss to need to shared according to the beginning capital balances.
Prepare a schedule showing the distribution of net income of the assuming the net income is $ 50,0000
ACT240
Dr. Faleel Jamaldeen
Page 1
Effat University
Assignment 1
Fall 2014
Part II
Question 4 (5 Marks)
Differentiate balance sheet of sole proprietorship, partnership and corporation.
Question 5 ( 5 Marks)
Why Micro Soft is not a partnership
Question 6 (5 Marks)
Sara is confused about the characteristics of a partnership of (a) Limited life (b) Unlimited liability and (c)
Co-ownership property (d) mutual agency. Explain each of the term to Sara
Question 7 (5 Marks)
How do the financial statement for a corporation differ from the statement of a proprietorship.
Question 8 (5 Marks)
Fathima an medical student asks your help in understanding the following characteristics of a corporation.
(a) Separate legal existence (b) limited liability of stockholders and (c) transferable ownership.
Question 9 (5 Marks)
(a). What are two principle components of stockholder’s equity
(b). What is paid in excess capital account under contributed capital.
Question 10 (10 Marks)
Journalize the following transaction and prepare T accounts.
(a). On May 20, Fox Inc. issued 25,000 ordinary shares of $ 10 par value at market price of $ 14.
(b). Jack Inc. got cash by issuing 10,000 ordinary shares at the market value of $ 18. The par value of the ordinary stock is $ 10.
Case study 1 (20 Marks)
Alaa and Aminah, two professionals in the finance area, have worked for First Ijara for an number of years.
First Ijara is a leasing company that leased high tech medical equipment for private hospitals in Jeddah.
Alaa and Aminah decided that, with their financial expertise, they might start their own company provide consulting services to individuals interested in leasing equipment. One form of organization they are considering is a partnership.
If they start a partnership, each individual plan to contribute SR 100,000 in cash. In addition, Alaa has a used Apple Mac Book the originally cost SR 5,000 which she intends to invest in the partnership. The computer has a present market value of SR 3,500.
Although both Alaa and Aminah are financial wizards,, they do not know a great deal about how a partnership operates. As result they may have come to you.
Instructions
a.
What are the major advantages and disadvantages of starting a partnership
ACT240
Dr. Faleel Jamaldeen
Page 2
Effat University
Assignment 1
Fall 2014
b. Amina wants to work full time in the new partnership. She believe that net income or let loss should be shared equally. However, they are wondering how they can provide compensation to their full time job of Amina in their own partnership and compensate Alaa for her additional investment of the computer. What would you tell them?
c. As indicated above, Alaa and Amina have worked together for a number of years. Alaa’s skills complement Amina’s vice versa. If one of them dies, it will be very difficult for other to maintain the business, not to mention the difficulty of paying the deceased partner’s estate for her partnership.
What would you advise them to do?
Activity (20 Marks)
Find two local business in your area that are different such as restaurant, a retailer, a construction company, a professional office (dentist, doctor etc.) and find the answers to the following questions.
a. Name of the both organization and their business.
b. How many owners
c. What form of organization do you use in your business?
d. What do you believe are the two major advantages and disadvantages
ACT240
Dr. Faleel Jamaldeen
Page 3
Assignment 1
Fall 2014
DEPARTMENT: FINANCE
INSTRUCTOR: DR. FALEEL JAMALDEEN
COURSE:
ACT 240 MANAGERIAL ACCOUNTING
STUDENT NAME:
STUDENT I.D.:
Part
Total Marks
Part 1
20
Part 2
40
Part 3
40
TOTAL
100
Marks Obtained
Instructions
1. All the answers need to be submitted hand written as hard copy.
2. The last date for submission of the assignment is 15th October 2014
3. If the assignment was found plagiarized or copied from another sources you will lose 10 marks)
Total grade 10
Answer all the questions
Part I
Question 1 (5 Marks)
M. Carson and R. Leno have partnership capital balances of $ 40,000 and $ 80,000 respectively. The partnership agreement indicates that net income or net loss should be shared equally. If …show more content…
net income for the partnership is $ 36,000, how the net income should be divided. How much income each partner will get? Question 2 (5 Marks)
SDTM Co. reports net income of $ 55,000. Partner salary allowances are Sweet $ 15,000, Drinian $ 5,000,
Tavros $ 5,000 and Martin $ 2,000. Indicate the net income of each partner assuming if the S and T share
50% of profit equally and the rest of the partner’s share 3:2 respectively.
Question 3 (10 Marks)
Martha and Jones have capital balances of January 1 of $ 50,000 and $ 40,000 respectively. The partnership income-sharing agreement provides for (1) annual salaries of $ 20,000 for Martha $ 12,000 for
Jones, (2) interest at 10% on beginning capital balances and (3) remaining income or loss to need to shared according to the beginning capital balances.
Prepare a schedule showing the distribution of net income of the assuming the net income is $ 50,0000
ACT240
Dr. Faleel Jamaldeen
Page 1
Effat University
Assignment 1
Fall 2014
Part II
Question 4 (5 Marks)
Differentiate balance sheet of sole proprietorship, partnership and corporation.
Question 5 ( 5 Marks)
Why Micro Soft is not a partnership
Question 6 (5 Marks)
Sara is confused about the characteristics of a partnership of (a) Limited life (b) Unlimited liability and (c)
Co-ownership property (d) mutual agency. Explain each of the term to Sara
Question 7 (5 Marks)
How do the financial statement for a corporation differ from the statement of a proprietorship.
Question 8 (5 Marks)
Fathima an medical student asks your help in understanding the following characteristics of a corporation.
(a) Separate legal existence (b) limited liability of stockholders and (c) transferable ownership.
Question 9 (5 Marks)
(a). What are two principle components of stockholder’s equity
(b). What is paid in excess capital account under contributed capital.
Question 10 (10 Marks)
Journalize the following transaction and prepare T accounts.
(a). On May 20, Fox Inc. issued 25,000 ordinary shares of $ 10 par value at market price of $ 14.
(b). Jack Inc. got cash by issuing 10,000 ordinary shares at the market value of $ 18. The par value of the ordinary stock is $ 10.
Case study 1 (20 Marks)
Alaa and Aminah, two professionals in the finance area, have worked for First Ijara for an number of years.
First Ijara is a leasing company that leased high tech medical equipment for private hospitals in Jeddah.
Alaa and Aminah decided that, with their financial expertise, they might start their own company provide consulting services to individuals interested in leasing equipment. One form of organization they are considering is a partnership.
If they start a partnership, each individual plan to contribute SR 100,000 in cash. In addition, Alaa has a used Apple Mac Book the originally cost SR 5,000 which she intends to invest in the partnership. The computer has a present market value of SR 3,500.
Although both Alaa and Aminah are financial wizards,, they do not know a great deal about how a partnership operates. As result they may have come to you.
Instructions
a.
What are the major advantages and disadvantages of starting a partnership
ACT240
Dr. Faleel Jamaldeen
Page 2
Effat University
Assignment 1
Fall 2014
b. Amina wants to work full time in the new partnership. She believe that net income or let loss should be shared equally. However, they are wondering how they can provide compensation to their full time job of Amina in their own partnership and compensate Alaa for her additional investment of the computer. What would you tell them?
c. As indicated above, Alaa and Amina have worked together for a number of years. Alaa’s skills complement Amina’s vice versa. If one of them dies, it will be very difficult for other to maintain the business, not to mention the difficulty of paying the deceased partner’s estate for her partnership.
What would you advise them to do?
Activity (20 Marks)
Find two local business in your area that are different such as restaurant, a retailer, a construction company, a professional office (dentist, doctor etc.) and find the answers to the following questions.
a. Name of the both organization and their business.
b. How many owners
c. What form of organization do you use in your business?
d. What do you believe are the two major advantages and disadvantages
ACT240
Dr. Faleel Jamaldeen
Page 3