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Economics, Accounting & Business: Post your doubts here!

WaleedUQ

WaleedUQ

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q5 1800/2100
q9 i think its wrong
q20
find purchases increase it buy 50% then calculate the creditors u'll get 240
why PURCHASES
because it said that creditors were increased to 50%
which means that first purchases were increased and because of them creditors increased ...
 
S

Saiyan

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mimiswift said:
ok Accounting
P3-M/J 2009- qns 5,9 and 20
QP- http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s09_qp_3.pdf
MS- http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s09_ms_1.pdf
Click to expand...

Okay you were looking at the marks scheme of p-1 not p-3.

Answer of number 5 is B. Just take the net asset part of the extracted balance sheet. Net asset after conversion will be
2700-810=1890. No. of shares after conversion is 1500+600=2100. Value of net asset per ordinary share becomes:
1890/2100=0.9.

Answer of 9 is A. This is tricky but I will try to explain. Accrued interest must be paid out annually so there will be no accrued interest balance. The 20,000 debenture has been redeemed so no question writing it in the current or long term loan. The debenture is payable each year so another 20,000 must be treated as current liabilities as it will be paid in the next year. The balance left which is 60,000 is then the long-term liabilities.

Answer of 20 is C. Creditors budget = 80,000+80,000 x 50% = 120,000
At November - 120,000 (To be paid in in Jan.)
At December- 120, (To be paid in Feb)
So total creditors becomes 240,000. The others have already been paid. Note that payment period is 2 months.

I hope this helped I tried my best. Anything else?
 
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wajiman

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Saiyan said:
Okay you were looking at the marks scheme of p-1 not p-3.

Answer of number 5 is B. Just take the net asset part of the extracted balance sheet. Net asset after conversion will be
2700-810=1890. No. of shares after conversion is 1500+600=2100. Value of net asset per ordinary share becomes:
1890/2100=0.9.

Answer of 9 is A. This is tricky but I will try to explain. Accrued interest must be paid out annually so there will be no accrued interest balance. The 20,000 debenture has been redeemed so no question writing it in the current or long term loan. The debenture is payable each year so another 20,000 must be treated as current liabilities as it will be paid in the next year. The balance left which is 60,000 is then the long-term liabilities.

Answer of 20 is C. Creditors budget = 80,000+80,000 x 50% = 120,000
At November - 120,000 (To be paid in in Jan.)
At December- 120, (To be paid in Feb)
So total creditors becomes 240,000. The others have already been paid. Note that payment period is 2 months.

I hope this helped I tried my best. Anything else?
Click to expand...

according to mark scheme, the answer to mcq 9 is D
 
mimiswift

mimiswift

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Saiyan said:
Okay you were looking at the marks scheme of p-1 not p-3.

Answer of number 5 is B. Just take the net asset part of the extracted balance sheet. Net asset after conversion will be
2700-810=1890. No. of shares after conversion is 1500+600=2100. Value of net asset per ordinary share becomes:
1890/2100=0.9.

Answer of 9 is A. This is tricky but I will try to explain. Accrued interest must be paid out annually so there will be no accrued interest balance. The 20,000 debenture has been redeemed so no question writing it in the current or long term loan. The debenture is payable each year so another 20,000 must be treated as current liabilities as it will be paid in the next year. The balance left which is 60,000 is then the long-term liabilities.

Answer of 20 is C. Creditors budget = 80,000+80,000 x 50% = 120,000
At November - 120,000 (To be paid in in Jan.)
At December- 120, (To be paid in Feb)
So total creditors becomes 240,000. The others have already been paid. Note that payment period is 2 months.

I hope this helped I tried my best. Anything else?
Click to expand...
thanks for yer help
i didn't really understand 20.....but i'm trying to...:)
 
M

MnMz

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reina81 said:
MJ03 Q19 I have no idea how to solve this. BTW ans is D
http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s03_qp_3.pdf
Click to expand...

I think you need to choose the price...that will give a rise to the same contribution ... and it will use existing machinery to make a contribution of 400000 ..... that means there will be definitely some variable costs....so 1000000 will give rise rise to a contribution of 400000 using the variable cost 600000 (frm the machinery) that will be able to cover the fixed costs as they will not change....

I hope you gt my explanation.....
 
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MnMz

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Manesh said:
MnMz you are right but according to the new way average investment=(initial investment+scrap value)/2 + working capital
Click to expand...

Yea true....but this paper is a june 2003..... so I think they based their answer using the old method =)
 
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Manesh

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Anusuya said:
m/j 10- p33- Q 29 How is it done??
q 11
q 12
Click to expand...
in q 29 just multiply each year net cash flow with its respestive discounted factor and in last add them up.
in this case multilply $8000 (1+0.909+0.826+0.751) = $27888 round off $27890
 
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MnMz

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Anusuya said:
m/j 10- p33- Q 29 How is it done??
q 11
q 12
Click to expand...

Q11 - For this they mean ROE (return on equity) when they say return on shares..... so use the formula -- Return on equity = Net Income/shareholders equity....so 25% = 20000/x ..... x=80000 the current value
 
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MnMz

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Anusuya said:
m/j 10- p33- Q 29 How is it done??
q 11
q 12
Click to expand...

q12 - The formula for rate return to an investor who buys shares = Distributions/Share price * 100
Distributions are the dividends and share price is the market price
Hence, acc. to the ques.... the answer will be... 0.21/1.40 * 100 = 15% =)
 
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Saiyan

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mimiswift said:
thanks for yer help
i didn't really understand 20.....but i'm trying to...:)
Click to expand...

Well no. 20 is actually the easiest. Observe that the creditors payment period is 60 days this means that creditors incurring in the last 2 months will be written as creditors as the previous month's one have already been paid. So creditors for two months will be 240,000
 
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