Evaluation of Existing Controls Recommendations
for Improvement IAS 16 Depreciation Concept and the Application of the Diminishing Balance Method Accounting for the Refrigeration System in Al Hajar LLC’s 2022 Financial StatementsCalculate Depreciation Charges for Al Hajar LLC for 2022 and answer related questions
COLLEGE OF BANKING AND FINANCIAL STUDIES
DEPARTMENT OF UNDERGRADUATE PROGRAMME
B.Sc. in Accounting, Auditing and Finance/BAAF
Group Assignment
Weightage: 30%
Student Name & ST Number
1.
2.
3.
Semester
2
Spring 2024
Assignment Title
Navigating Financial Accuracy: Bank Reconciliation,
Internal Controls, and Depreciation Analysis in Oman’s
Business Landscape
Module
Financial Accounting 2
UG037
Assessor:
Dr. Mohammed Al Lawati
Dr. Suad Jaseem
Start Date:
5/4/2024
Internal
Verifier
Dr. Yasmeen AL Balushi
Due Date:
Formative:
Summative: 5/05/2024
FA 2 Assignment Brief Spring 2024
Required Work, Format and Grading
You must submit the following by the assignment due date:
▪ Completed answers to each task, making sure that you fully address each of the outcome criteria.
▪ Answer all questions separately.
▪ Assignments without TURNITIN report will not be accepted.
Resources:
You need to demonstrate a confident application of the theories to the assignment task. The theoretical
underpinning of your observations and deliberations should also demonstrate a good understanding of the
subject by the way that your analysis is structured.
You can access the Internet to research about the topic. You should demonstrate good academic practice
by the appropriate use of academic texts and journals that are properly referenced.
Guidelines and further information about assignment:
Assignment must be submitted with the “Turnitin” report. If the report generated indicates a
similarity index percentage of 20% or more, a review of your assignment is necessary to ensure the
same is reduced to less than 20%.
Student declaration:
I certify that the work contained in this assignment was researched and prepared by me:
Signature: ___________________________
Date: ___________________
The user ID and Password for submitting the soft copy of the report through TURNITIN is as
follows:
Class ID:
Enrolment Password:
THE ASSIGNMENT WILL BE SUBMITTED ON MS. TEAM
Submission time and date
You should submit the assignment by the time and date mentioned otherwise a ‘NA’ will be awarded.
Fill in the form cover and staple it with your assignment. Make sure that all the relevant details are
complete. Assignments must be submitted by the due date. You may include diagrams, figures etc
without word penalty.
Plagiarism Writing
1. Plagiarism occurs if you use somebody else’s work in an assignment or exam answer, but fail
to state where you got the material from. You need to be also very careful about the amount of
words you are using from somebody else’s work.
2. It can happen in any type of assessment where you are given the questions or tasks in advance.
3. If another student uses your work in his/her answer(s), both you and he/she will be punished
when caught.
4. Punishments for committing plagiarism can be very severe.
Details
Plagiarism is a form of cheating in which students use the work of others and present it as their own. It
FA 2 Assignment Brief Spring 2024
may include all or any one of the following –
1. Copy extensively from the work of others (from sources such as books, magazines, journal,
web-sites etc) and submit the work as your own.
2. Copy another students’ work and submit it for assessment under your own name.
3. Allow another student to copy your work and then submit it for assessment under their own
name.
What happens if you get caught?
The examining body of CBFS may punish offending students in any manner that they deem fit. Typical
punishments may range from reduction in grades, making students re-sit modules and even failing
students on a module or an entire award. The college considers this form of cheating as a serious offence.
Therefore, be forewarned!
LO 2
Demonstrate knowledge and understanding of bank reconciliation concepts and the
preparation of bank reconciliation statement.
LO 4
Demonstrate knowledge and understanding of concepts depreciation and construction of cost
of tangible assets; and application of various methods during preparation of depreciation
charges for the year of tangible assets.
Important Instructions:
✓ It is a group assignment.
✓ Total marks: 30 (25 marks for report & 5 presentation).
✓ Write your name and put your signature in the boxes at the top of this page.
✓ You should write your answers clearly and show relevant workings.
✓ Use Times Roman / Arial font of 12 size, 1 ½ spacing.
✓ Calculations and references, please ensure that your answers include all relevant
information, data etc.
✓ Downloading information and pasting it in assignment is prohibited.
✓ Plagiarism is an academic offence. Avoid plagiarism.
✓ Assignment word limits – not applicable
FA 2 Assignment Brief Spring 2024
Question 1
You are given the financial details of the White-Water Kayak Company, based in Oman, for the
month of September. The company specializes in outdoor water sports equipment, with a strong
focus on kayaks and accessories. As part of the finance team, you are tasked with reconciling the
company’s bank statements with its ledger accounts to ensure accuracy in financial reporting.
Scenario Details:
1.
The balance per the bank statement on September 30 is OMR 6,900.
2.
The Cash account balance in the company’s ledger on September 30 is OMR 5,573.
3.
Cash receipts recorded on September 30 amount to OMR 5,850, which have not been
processed by the bank yet.
4.
The bank statement includes a debit memo of OMR 25 for check printing charges.
5.
Check No. 119, meant for Blacque Company, was erroneously recorded at OMR 236 instead
of the correct amount of OMR 263.
6.
Outstanding checks totaling OMR 4,800 have not yet been cleared by the bank.
7.
Check No. 148 was issued for OMR 408 but was mistakenly recorded in the company’s books
as OMR 480.
8.
An NSF (Non-Sufficient Funds) check from a customer, amounting to OMR 340, was returned
by the bank.
9.
The bank collected a note receivable for the company, totaling OMR 2,670 (principal amount
OMR 2,600 plus OMR 70 interest), which was not yet recorded in the company’s books.
FA 2 Assignment Brief Spring 2024
Instructions:
1. Part A: Bank Reconciliation: Prepare a bank reconciliation statement for White Water
Kayak Company as of September 30, considering the discrepancies and information
provided. (8 Marks total); Identification of Adjustments (3 Marks)& Accuracy of
Calculations(5 Marks)
2. Part B: Reflective Essay (300- 500 Words): Reflect on the importance of the bank
reconciliation process in maintaining the accuracy of cash records and preventing fraud.
Discuss how the identified discrepancies could affect the financial health of the company if
left unaddressed. Consider the specific context of a company operating in Oman’s dynamic
market. (3 Marks Total); Understanding and Reflection (1.5 Marks) Contextual
Application and Writing Quality (1.5 Marks).
3. Part C: As a critical part of the finance team at White Water Kayak Company, you are also
expected to assess the effectiveness of the company’s internal control systems. Based on the
discrepancies noted in the bank reconciliation process, evaluate the company’s current internal
controls over cash transactions.
•
Evaluation of Existing Controls (1 Mark): Analyze the internal control weaknesses that
might have allowed the discrepancies listed in the bank reconciliation to occur. Consider
segregation of duties, authorization of transactions, access controls, and reconciliation
procedures.
•
Recommendations for Improvement (1 Mark): Propose specific changes or
enhancements to White Water Kayak Company’s internal control procedures that could
prevent such discrepancies in the future. These may include improvements in oversight,
technological updates, or process changes that are particularly relevant to the business
environment in Oman.
Question 2
Al Hajar Electronics LLC Asset Acquisition and Depreciation
On 1st April 2022, Al Hajar Electronics LLC, a company based in Oman specializing in retailing
high-quality electronic goods, acquires a new refrigeration system for its main warehouse from
CoolTech Solutions. The financial and operational details of the purchase are as follows:
OMR:
•
•
•
•
List price of the refrigeration system: 62,000
Import duty: 1,200
Delivery fees: 1,750
Installation costs: 6,500
FA 2 Assignment Brief Spring 2024
•
•
Pre-production testing: 3,600
Purchase of a four-year service agreement with CoolTech Solutions: 5,500
Additionally, Al Hajar Electronics LLC was granted a trade discount of 15% on the initial list price
of the refrigeration system and a settlement discount of 5% if payment was made within 30 days
of purchase. The payment for the refrigeration system was completed on 20th April 2022.
The refrigeration system is estimated to have a useful life of 8 years with a potential salvage value
of OMR 6,250 at the end of its use. The estimated usage is 70,000 cooling hours over its lifetime.
In the year 2022, Al Hajar Electronics LLC uses the refrigeration system for 900 hours.
Required:
1.
IAS 16 Depreciation Concept and the Application of the Diminishing
Balance Method (2 Marks):
• Explain the concept of depreciation according to IAS 16 and how
the diminishing balance method would be applied, focusing on
the context of Oman.
2.
Accounting for the
Refrigeration
System
in
Al Hajar
Electronics
LLC’s 2022 Financial Statements (2Marks):
• Describe how the acquisition and subsequent depreciation of the
refrigeration system should be recorded in Al Hajar Electronics
LLC’s financial statements for the year ended 31st December
2022.
3.
Calculate Depreciation Charges for Al Hajar Electronics
2022 and answer related questions (8 Marks Total 1 mark for each)
• Using the straight-line method.
•
Applying the activity method based on cooling hours for 2022.
•
Implementing the sum-of-the-years’ digits method for 2022.
•
Calculating
using
the
diminishing
(written
LLC
for
method
for
down)
value
highest
deduction
2022.
•
Which
Depreciation
method
final year of an asset’s life?
FA 2 Assignment Brief Spring 2024
provides
the
in
the
•
Which depreciation method produces a constant periodic expense as an asset
depreciates?
•
What is the difference between Depreciation for financial reporting purposes and tax
purposes?
•
Which method provides a larger Depreciation deduction under an accelerated-cost
recovery system?
FA 2 Assignment Brief Spring 2024

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