College of Administration and Finance Sciences Assignment (1) Deadline: Saturday 2/3/2024 @ 23:59 Course Name: Advanced Financial Accounting Student’s Name: Course Code: ACCT 302 Student’s ID Number: Semester: Second Semester CRN: Academic Year: 1445 H For Instructor’s Use only Instructor’s Name: Dr. Shahid Husain Students’ Grade: /15 Level of Marks: High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY • The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. • Assignments submitted through email will not be accepted. • Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. • Students must mention question number clearly in their answer. • Late submission will NOT be accepted. • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. • All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism. • Submissions without this cover page will NOT be accepted. 1 College of Administration and Finance Sciences Assignment Question(s): (Marks 15) Q1. Z Corporation acquired 100% of the outstanding common stock of Sake X Corporation for $ 3,000,000 cash and 50,000 shares of its own common stock ($1 par value), which was trading at $30 per share at the acquisition date.(3 marks) Required: Prepare The Journal Entry to Record the Acquisition Transaction on the Acquiring Incorporation’s Journal. Answer: 2 College of Administration and Finance Sciences Q2. In The Process of the Acquisition, Z Incorporation Paid In Cash the Following Expenses ($): (3 marks) Legal fees 50,000 Accounting fees 20,000 Travel expenses 5,000 Legal fees (SEC) 40,000 Accounting fees (SEC) 10,000 SEC filing fees 15,000 Required: Prepare the journal entry to record the acquisition expenses. Answer: 3 College of Administration and Finance Sciences Q3. Z Incorporation acquired significant influence over Y Company by purchasing 100 percent of the common stock of the Y Incorporation for $100,000; Y earns income of $50,000 and pays dividends of $10,000(4 marks) Required: Pass Journal Entries To Update The Investment Account In Y Incorporation Using Equity Method And Cost Method. Answer: 4 College of Administration and Finance Sciences Q4. Given the Following Information for 2023(5 marks) Z owns 70% of Y Y net income for 2023 is $150,000 Y declares dividends of $10,000 during 2023. Y has 20,000 shares of $ 1 par value per stock outstanding that issued for $10 per share. Y beginning balance in Retained Earnings for 2023 is $50,000. Required: Prepare Basic Elimination Entry Using Equity Method Answer 5