Economics, Accounting & Business: Post your doubts here!

[Saiyan]

'If the premium being paid on the redemption of shares exceeds the amount permitted to be debited to the Share Premium account the difference must be charged to the Profit/Loss Account.' - Harold Randall CIE book Pg-186

I went through all the IAS relevant to the syllabus but could not find anything related to redemption. We do not need IAS outside the syllabus.

 

[MnMz]

some one please help me in no. 24 and 21. http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w11_qp_32.pdf

24- D
it basically asks for the production budget....you have the sales and stocks
Sales will require 400 kg ... so opening stock is 20 bt closing stock is 25
So all u need to do is find the purchases (400-20+25)

 

[MnMz]

some one please help me in no. 24 and 21. http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w11_qp_32.pdf

21- A
Well first you find the difference in the stocks (6000)
Then the differences in profit (48000)
Divide (48000/6000) = 8
This is because in absorption costing.....fixed cost is included in the closing stock...=)

 

[reina81]

Q 11, why did they subtract the reserves from the total value. (A) http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s11_qp_31.pdf

Yaar someone help please.

 

[Manesh]

here is the answer:

First lets calculate the depreciation: $100,000/5 years = $20,000
we will then add the capitalization cost to it as it is a further investment in the asset.
so total balance sheet value is $150,000 - $20,000 (as it is one year the sales has commenced, meaning that the asset was bought 1 year b4) so we will subtract the depreciation = $130,000

Profit and Loss account, we will ignore the Research expenditure in Investment Appraisal as it is a sunk cost but will charge it in the P and L account as it is an expense. so research expenditure + depreciation = Expense charged in P and L:

$30,000 + $20,000 = $50,000

answer is C, check through mark scheme

Thank you.

 

[Saiyan]

Q.10
http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w09_qp_32.pdf
MnMz WaleedUQ wajiman redapple20 Saiyan youzair

For the profit and loss account: Research exp. of 30,000 + Depreciation of 20,000
For balance sheet: Net book value of the completed project- 100,000-20,000 + Project for capitalization: 50,000

 

[MnMz]

Yaar someone help please.

They subtracted to find the nominal value...

 

[Anusuya]

acc. m/j 07 Q19. ??

 

[MnMz]

acc. m/j 07 Q19. ??

So the profit gained from 10 students is 320
So we need to find the reduction needed to give us the same profit for 20 students.

 

[reina81]

They subtracted to find the nominal value...

I don't get it. Is this like some new rule or something?
Also in ON11 P32 Q 7 is there a mistake in the question ?
http://www.xtremepapers.com/papers/...AS Level/Accounting (9706)/9706_w11_qp_32.pdf

 

[Saiyan]

Yaar someone help please.

MnMz, I think we still need a valid reason. This question is really troubling me.

 

[WaleedUQ]

I don't get it. Is this like some new rule or something?
Also in ON11 P32 Q 7 is there a mistake in the question ?
http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w11_qp_32.pdf

yaar dekho at market value means plus premium
trading at market value is 95 for debentures
10000/10 x 95 = 95000 worth deb..
20000 cash
and add the o\s
the ans is D

 

[Saiyan]

yaar dekho at market value means plus premium
trading at market value is 95 for debentures
10000/10 x 95 = 95000 worth deb..
20000 cash
and add the o\s
the ans is D

Can you explain the debenture calculation.

 

[reina81]

yaar dekho at market value means plus premium
trading at market value is 95 for debentures
10000/10 x 95 = 95000 worth deb..
20000 cash
and add the o\s
the ans is D

sorry but why do we divide 10000 by 10?

 

[Saiyan]

WaleedUQ can you also explain May-Jun 2011 Paper-32 Q10.

 

[Manesh]

sorry but why do we divide 10000 by 10?

to get the number of debenture notes.

 

[MnMz]

I don't get it. Is this like some new rule or something?
Also in ON11 P32 Q 7 is there a mistake in the question ?
http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w11_qp_32.pdf

If the 15 000 shares have a book value of $50 each then their total value is $750 000. Their nominal value must, therefore be $750 000 - $420 000 / 15 000 = $22.

 

[Saiyan]

MnMz that was smart!

 

[reina81]

If the 15 000 shares have a book value of $50 each then their total value is $750 000. Their nominal value must, therefore be $750 000 - $420 000 / 15 000 = $22.

so in general book value= nominal value + reserves?

 

[MnMz]

so in general book value= nominal value + reserves?

the term 'book value' is often used since it focuses on the values that have been added and subtracted in the accounting books of a business (assets - liabilities).

Nominal Value, Face Value or Par Value of Shares-Value of the Share as indicated on the Share Certificate​

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