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9706....AS/A level Accounting Post ur doubts here...!

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21 Arun wishes to invest in a business with a skilled workforce which will make a profit in each of the
next five years.
Which aspect of financial statements helps Arun to decide where to invest?
A Financial statements deal with past performance.
B Historic cost is based on objective figures.
C Non-monetary values are excluded.
D Provisions can be based on estimates.
answer is b how?
23 A company is going to sell a surplus non-current asset.
Which term describes the net book value of the non-current asset in respect of the decision to
sell?
A a fixed cost
B a stepped cost
C a sunk cost
D a variable cost
answer is c how?
 
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Bonus issue doesnt bring any cash inflow or outflow ... rather rights issue does affect the cash flows
at 31 dec'04 after bonus issue the total shareholder's equity should remain same i.e, 150 but it increased to ( 130+80 = 210) till the end of 31 dec'05.
the increase in cash would hace been 210 - 150 = $60 m

so the ans. is D.
remember me in ur prayers...
 
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ohh ya ... my bad .. :D
anyway how to get D ? View attachment 39893

For July

Opening Inventory = 300 * 50% = 150
Closing inventory = 600 * 50% = 300
Sales = 300

Production = Sales + Closing I/V - Opening I/V = 300 + 300 - 150 = 450 units

450 units is 90% of total production as 10% was wasted.

450 -- -- 90%
x -- -- 100 %

Cross multiply and we get 450 / 0.9 = 500 units.

Hope it helped... rem me in ur prayers.!
 
Messages
191
Reaction score
175
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53
21 Arun wishes to invest in a business with a skilled workforce which will make a profit in each of the
next five years.
Which aspect of financial statements helps Arun to decide where to invest?
A Financial statements deal with past performance.
B Historic cost is based on objective figures.
C Non-monetary values are excluded.
D Provisions can be based on estimates.
answer is b how?
23 A company is going to sell a surplus non-current asset.
Which term describes the net book value of the non-current asset in respect of the decision to
sell?
A a fixed cost
B a stepped cost
C a sunk cost
D a variable cost
answer is c how?

For the first one... Historical cost shows the relative cost of expenses and incomes and this is the only thing that will help most in deciding the optimum invest plan so the ans. is B.

For the second one a NBV of a non-current asset is not a fixed cost as it's not incurred each year (possibly) has no effect on units and may not exist if zero units for e.g if the asset isn't owned .A stepped cost is semi variable and variable cost is wholly variable both of which depend on units. As NBV of non-current asset does not depend upon units so A,B,D aren't possible . Thus C is the ans. Sunk cost is cost already incurred and wont change or vary now which best describe the nature of NBV cost of non current assets.
 
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For the first one... Historical cost shows the relative cost of expenses and incomes and this is the only thing that will help most in deciding the optimum invest plan so the ans. is B.

For the second one a NBV of a non-current asset is not a fixed cost as it's not incurred each year (possibly) has no effect on units and may not exist if zero units for e.g if the asset isn't owned .A stepped cost is semi variable and variable cost is wholly variable both of which depend on units. As NBV of non-current asset does not depend upon units so A,B,D aren't possible . Thus C is the ans. Sunk cost is cost already incurred and wont change or vary now which best describe the nature of NBV cost of non current assets.
but NBV changes each year by reducing depreciation. so isnt it the variable cost?
 
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http://papers.xtremepapers.com/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s10_qp_23.pdf in q3 part a ... y do v only use the additional fixed cost .. not the total fixed cost ??
and plssss tell how to do part d ?
PART A:-
Actually i think 8 million is the fixed cost of cabinet 1 which may happen to be rent of warehouse etc because he is not producing it. in cabinet 2 and 3 he is manufacturing it, so there are many other fixed costs which incer while producing.

PART D:-
find the profit of cabinet production where buying cabinet 1 profit is equal to making cabinets.
 
Messages
6,514
Reaction score
26,001
Points
698
21 Arun wishes to invest in a business with a skilled workforce which will make a profit in each of the
next five years.
Which aspect of financial statements helps Arun to decide where to invest?
A Financial statements deal with past performance.
B Historic cost is based on objective figures.
C Non-monetary values are excluded.
D Provisions can be based on estimates.
answer is b how?
23 A company is going to sell a surplus non-current asset.
Which term describes the net book value of the non-current asset in respect of the decision to
sell?
A a fixed cost
B a stepped cost
C a sunk cost
D a variable cost
answer is c how?
anyone?
 
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