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ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)

ADVANCED FINANCIAL ACCOUNTING (8553)

CHECKLIST

SEMESTER: SPRING, 2018

This packet comprises the following material:

1. Textbook (one)
2. Assignment No. 1, 2
3. Assignment Forms ( 2 sets )

In this packet, if you find anything missing out of the above mentioned material,
please contact at the address given below:

The Mailing Officer


Allama Iqbal Open University
Sector H-8, Islamabad
Ph: 051-9057611-12

Muhammad Munir Ahmad


(Course Coordinator)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Commerce)
[

WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING
THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.

Course: Advanced Financial Accounting (8553)


Level: M.Com Semester: Spring, 2018
Total Marks: 100 Pass Marks: 50
ASSIGNMENT No. 1
Q.1 a) Describe the Governance and Structure of the IASC foundation, IASB,
IFRIC, and the SAC. (10)
b) What do you know about IFRS? Explain in detail. (10)

Q.2 Define AIS and explain that why is it important to view an AIS as a combination of
hardware, software, people, data, and procedures? (10)

Q.3 The following transactions for Super Tire Company occurred during the month of
March 2017: (20)
a. Purchased 500 automobile tires on account at a cost of Rs. 40 each for a total
of Rs. 20,000.
b. Purchased 300 truck tires on account at a cost of Rs. 80 each for a total of Rs.
24,000.
c. Returned 12 automobile tires to the supplier because they were defective.
d. Paid for the automobile tires.
e. Paid for half the truck tires
f. Paid the remaining balance owed on the truck tires.
g. Sold on account 400 automobile tires at a price of Rs. 90 each for a total of
Rs. 36,000.
h. Sold on account 200 truck tires at a price of Rs. 150 each for a total of Rs.
30,000.
i. Accepted return of 7 automobile tires from dissatisfied customers.

Required:
i. Prepare journal entries to account for the above transactions assuming a
periodic inventory system.
ii. Prepare journal entries to account for the above transactions assuming a
perpetual inventory system.

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iii. Assume that inventory levels at the beginning of March (before these
transactions) were100 automobile tires that cost Rs. 40 each and 70 truck
tires that cost Rs. 80 each. Also, assume that a physical count of inventory at
the end of March revealed that 184 automobile tires and 164 truck tires were
on hand. Given these inventory amounts, prepare the closing entries to
account for inventory and related accounts as of the end of March.

Q.4 The income statements for P and S for the year ended 31st December 2017 are
shown below. P acquired 80% of the ordinary share capital of S several years ago.
You are required to prepare the consolidated comprehensive income for the year
2017. (15)
P S
Rs '000' Rs '000'
Sales 2,400 800
Cost of sales and expenses (2,160) (720)
Gross profit 240 80
Investment income:
Dividend received from S 2
profit before tax 242 80
Tax (115) (38)
Profit after tax 127 42

Q.5 Kraft Unlimited, Inc., was organized and authorized to issue 5,000 shares of Rs.
100 par value, 9 percent preferred stock and 50,000 shares of no par, Rs. 5 stated
value common stock on July 1, 2014. Stock-related transactions for Kraft
Unlimited follow. (20)
July 1 Issued 10,000 shares of common stock at Rs. 11 per share.
1 Issued 500 shares of common stock at Rs. 11 per share for services
rendered in connection with the organization of the company.
2 Issued 1,000 shares of preferred stock at par value for cash.
10 Issued 2,500 shares of common stock for land on which the asking
price was Rs. 35,000. Market value of the stock was Rs. 12.
Management wishes to record the land at the market value of the stock.
August 2 Purchased 1,500 shares of its common stock at Rs. 13 per share.
10 Declared a cash dividend for one month on the outstanding preferred
stock and Rs. 0.02 per share on common stock outstanding, payable on
August 22 to stockholders of record on August 12.
12 Date of record for cash dividends.
22 Paid cash dividends.
Required

(20)
a) Prepare journal entries to record these transactions.

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b) Prepare the stockholders’ equity section of Kraft’s balance sheet as it would appear
on August 31, 2014. Net income for July was zero and August was Rs. 11,500
Q.6 From the following given particulars, you are required to determine the (i) annual
rental payments (ii) lease classification (iii) prepare the Amortization Schedule (iv)
Also pass the journal entries throughout the lease term in the books of lessee.
Annual Rentals are payable at the beginning of each year. (15)

Lease signed on January 1, 2017


Lease Term 3 years
Fair value of the Assets at inception Rs. 24,000
Economic Life 5 years
Implicit Interest Rate 15%
Bargain Purchase Option Rs. 6,000
Depreciation method Straight Line

GUIDELINES FOR ASSIGNMENT # 1

The student should look upon the assignments as a test of knowledge, management skills,
and communication skills. When you write an assignment answer, you are indicating your
knowledge to the teacher:
 Your level of understanding of the subject;
 How clearly you think;
 How well you can reflect on your knowledge & experience;
 How well you can use your knowledge in solving problems, explaining situations,
and describing organizations and management;
 How professional you are, and how much care and attention you give to what you
do.

To answer a question effectively, address the question directly, bring important related
issues into the discussion, refer to sources, and indicate how principles from the course
materials apply. The student must also be able to identify important problems and
implications arising from the answer.

For citing references, writing bibliographies, and formatting the assignment, APA format
should be followed.

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ASSIGNMENT No. 2
Total Marks: 100 Pass Marks: 50

This assignment is a research-oriented activity. You are required to obtain information


from a business/commercial organization and prepare a report of about 1000 words on
the issue allotted to you to be submitted to your teacher for evaluation.

You are required to select one of the following issues according to the last digit of your
roll number. For example, if your roll number is P-3427182 then you will select issue # 2
(the last digit): -
ISSUES:
0- The need for a common set of accounting and financial reporting standards
1- Constraints and trade-offs between different qualitative characteristics of Financial
Statements
2- A comprehensive study on International Accounting Standard 17 (IAS 17)
3- Presentation of Financial Statements (IAS 1)
4- Accounting for Merchandizing Business
5- A comprehensive study on International Accounting Standard 2 (IAS 2)
6- Presentation of Annual Accounts of Banking Companies according to accounting
standards.
7- Accounts of Insurance Companies
8- A comprehensive study on International Accounting Standard 27 (IAS 27)
9- An Accounting Information System of an entity
The report should follow the following format:
i. Title page
ii. Acknowledgements
iii. An abstract (one page summary of the paper)
iv. Table of contents
v. Introduction to the issue (brief history & significance of topic assigned)
vi. Practical study of the organization (with respect to the topic)
vii. Data collection methods
viii. Conclusion (one page brief covering important aspects of your report)
ix. Recommendations (specific recommendations relevant to issue assigned)
x. References (as per APA format)
xi. Annexes (if any)
GUIDELINES FOR ASSIGNMENT # 2:
 1.5 line spacing
 Use headers and subheads throughout all sections
 Organization of ideas
 Writing skills (spelling, grammar, punctuation)
 Professionalism (readability and general appearance)
 Do more than repeat the text
 Express a point of view and defend it.

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WORKSHOPS

The workshop presentations provide students opportunity to express their communication


skills, knowledge & understanding of concepts learned during practical study assigned in
assignment # 2.

You should use transparencies and any other material for effective presentation. The
transparencies are not the presentation, but only a tool; the presentation is the
combination of the transparencies and your speech. Workshop presentation transparencies
should only be in typed format.

The transparencies should follow the following format:


1) Title page
2) An abstract (one page summary of the paper)
3) Introduction to the issue (brief history & significance of topic assigned)
4) Practical study of the organization (with respect to the issue)
5) Data collection methods
6) Conclusion (one page brief covering important aspects of your report)
7) Recommendations (specific recommendations relevant to topic assigned)

GUIDELINES FOR WORKSHOP PRESENTATION:


 Make eye contact and react to the audience. Don't read from the transparencies or
from report, and don't look too much at the transparencies (occasional glances are
acceptable to help in recalling the topic to cover).
 A 15-minute presentation can be practiced several times in advance, so do that until
you are confident enough. Some people also use a mirror when rehearsing as a
substitute for an audience.

WEIGHTAGE OF THEORY & PRACTICAL ASPECTS IN ASSIGNMENT # 2 &


WORKSHOP PRESENTATIONS

Assignment # 2 & workshop presentations are evaluated on the basis of theory & its
applicability. The weightage of each aspect would be:
Theory: 60%
Applicability (practical study of the organization): 40%

Note: Assignments and presentation carry 300 Marks:


Assignment 01 100 Marks
Assignment 02 (Submission) 100 Marks
Assignment 02 (Presentation) 100 Marks