Accounting doubts & Queries

[hitler575]

I am an Accounts teacher and open to your queries. I will try my best to answer each one of you.

 

[Lostsoul]

http://papers.xtremepapers.com/CIE/... AS Level/Accounting (9706)/9706_s05_qp_4.pdf
Salaams
I couldnt workout the operating profit it commeneces with in question 1. The operating profit is 227. Help pls !

 

[afshinsalim]

Hi,
i need help with may/june 2008 paper 3 question 1. How is the answer B? Help pllleease.
Thank u

 

[Lostsoul]

Hello Mr.hitler575 . I baaadly need ya help

 

[hitler575]

Hi,
i need help with may/june 2008 paper 3 question 1. How is the answer B? Help pllleease.
Thank u

Answer is C.

 

[hitler575]

Hello Mr.hitler575 . I baaadly need ya help

What help?

 

[Lostsoul]

What help?

http://papers.xtremepapers.com/CIE/... AS Level/Accounting (9706)/9706_s05_qp_4.pdf
Salaams
I couldnt workout the operating profit it commeneces with in question 1. The operating profit is 227. Help pls !

 

[afshinsalim]

Answer is C.

oops sorry. how do they get C?

 

[ICCWC2015]

the following information has been extracted from the trial balance of a business:
sales 100000, purchases 60,000, wages 21000.

closing stock was 3000 more than opening stock.
1/3 of the wages was charged to cost of sales in the trading section of the income statement.
what was the gross profit?

the book says that the answer is 36000 but how ?

 

[IGCSE Abdullah]

I am an Accounts teacher and open to your queries. I will try my best to answer each one of you.

Mr hitler575 could you guess what types of question may be coming paper 31 this year??

 

[hitler575]

the following information has been extracted from the trial balance of a business:
sales 100000, purchases 60,000, wages 21000.

closing stock was 3000 more than opening stock.
1/3 of the wages was charged to cost of sales in the trading section of the income statement.
what was the gross profit?

the book says that the answer is 36000 but how ?

Sales - C.O.S= G.P, Cl.Inv= Op.Inv +3000

In this case C.O.S= Op.Inv+Purchases+(1/3Wages)- (Op.Inv + 3000)
Further Simplifying COS= Op.Inv+Purchases+1/3Wages- Op.inv - 3000
So OP.inv(Op.Inv-Op.Inv) cancels out and you're left with COS=Purchases + 1/3wages -3000 I.e COS=60000+7000-3000=64000 Therefore GP = 100000-64000=36000.

OR Just Assume any number of Op.Inv and adjust the Cl.Inv accordingly, you will end up getting same answer for COS.(Because the net effect will always be -ve 3000) I assume OpInv = 10000(and Cl.Inv will then be 13000) So COS=10000+60000+7000-13000= 64000.

 

[hitler575]

http://papers.xtremepapers.com/CIE/... AS Level/Accounting (9706)/9706_s05_qp_4.pdf
Salaams
I couldnt workout the operating profit it commeneces with in question 1. The operating profit is 227. Help pls !

Operating Profit- Interest Exp- Tax exp- Div.paid=Retained Profit, Therefore Op.Profit=Retained Profit + Div + Tax exp + Int.Exp.

Workings: Int Exp= 150(Debentures) multiply by 6%(Int.Rate)= $9000
For Ord.Div.Paid; Div.Yield= Div.Paid/M.V of all Ord.share. i.e 2.5%= Div.paid/(1.6 multiply by 2500 shares). So Div.paid= 2.5% into 4000=$ 100.
Pref.Div= Pref shares into 10%= 300 into 10%= $30.
For Tax.Exp; Op.Liab + Tax.Exp(current year) - Tax Paid= Cl.liab. Reshuffle it : Tax.Exp(Bal.Fig in T.account)= Cl.liab-op.liab+Tax paid. So Tax.Exp= 31000-25000+22000= $28000.

So; Operating Profit= 60000+130000+28000+9000= $227.

Note= Draw a Tax.Liab T.account for better understanding of how I got to Tax.Exp.

 

[Sarah Paul]

can u please give me notes on control accounts not the basic abt it and also notes on the concepts please sir hitler575 and the others if ull have?

 

[ICCWC2015]

Thanks a lot now I understand....I never knew there will be cancelling in Accounting also..
Thanks a lot...God Bless You

 

[ICCWC2015]

the owner of a business has taken goods for his own use but no entry has been made in the book to record this. what is the effect of this on this statement of financial position?
Inventory. Capital.
A. No effect. No effect
B. No effect. Overstated
C. Overstated. No effect
D. Overstated. Overstated.
please also explain how it is done?

 

[ICCWC2015]

The following information has been extracted from a Statement of financial position on 31 december
Non current assets 310,000
Working capital. 30,000
Long term loan. 20,000
Profit for the year. 35,000
Drawings. 25,000
what was the balance on capital account at 31st December 2010.
A. 300000
B. 320000
C. 340,000
D. 350,000
please explain also how it is done?

 

[hitler575]

the owner of a business has taken goods for his own use but no entry has been made in the book to record this. what is the effect of this on this statement of financial position?
Inventory. Capital.
A. No effect. No effect
B. No effect. Overstated
C. Overstated. No effect
D. Overstated. Overstated.
please also explain how it is done?

Entries made regarding Stock withdrawn: 1) Drawings (Dr), Purchases(Cr), 2) Capital (Dr), Drawings (Cr). Therefore Ans is A. (Closing Inv is always physically counted).

 

[hitler575]

The following information has been extracted from a Statement of financial position on 31 december
Non current assets 310,000
Working capital. 30,000
Long term loan. 20,000
Profit for the year. 35,000
Drawings. 25,000
what was the balance on capital account at 31st December 2010.
A. 300000
B. 320000
C. 340,000
D. 350,000
please explain also how it is done?

Non current Assets + Working capital- longterm loans= Closing.Capital(Imagine the Bal.sheet and you will understand this equation). Closing.Capital= Op.Capital+ profit - drawings. Therefore 310+30-20=320. Ans is B.

 

[ICCWC2015]

Non current Assets + Working capital- longterm loans= Closing.Capital(Imagine the Bal.sheet and you will understand this equation). Closing.Capital= Op.Capital+ profit - drawings. Therefore 310+30-20=320. Ans is B.

Thank you...I understand what u meant..but my book's answer is 300000

 

[hitler575]

Thank you...I understand what u meant..but my book's answer is 300000

If the data in the question is given for 31 Dec 2011 then the book is correct. I have assumed data to be given for 31 dec 2010.