Economics, Accounting & Business: Post your doubts here!

[Mohammed Hassan]

The question says that bad debts had already been written off. So you just have to multiply the 5% with 125400. You get 6270. That minus 1800 = 4470

thhhhnnnnnx i thought that too (Y)

 

[Mad Gal]

thhhhnnnnnx i thought that too (Y)

welcome

 

[Mohammed Hassan]

you have to credit it under other income in your PL acc!
In your manu acc you just show the break down after you find the cost of production. Nothing else.

Yup! thats what i exactly meant thnx appreciate everything u did

 

[Mohammed Hassan]

Mad Gal
do u have any doubts in accounting xD? just asking...

 

[Jet Nicholos]

hii!!! i have accounts mcq tom... so... well.. how do u do the JUNE 2003 Q9?? the bank reconcilation... i followed the method.. im not getting it...! the answer is B~ please help~

 

[Jet Nicholos]

well the link is http://www.xtremepapers.com/papers/... AS Level/Accounting (9706)/9706_s03_qp_1.pdf ~~ Q9 pleaseee~~

 

[wajiman]

http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s11_qp_12.pdf
question 8 and 19

for question no.8:

as the share have a face value of $5 and premium of $15, we will multiply the no.of share with $20, 50,000 * $20 = $1,000,000
Now as we know net assets = assets - liabilities, therefore, the effect of the debentures will be zero because in the liabilities side $300,000 liability is increasing and on the other had cash in current assets is also increasing by $300,000. so the net assets would increase by $1,000,000. if the debentures would have been issued at premium, then the result would be different.

for question no.19:

just put the ROCE forumula = Profit before interest and tax/Capital employed * 100

Operating profit = $128,000
Capital Employed = fixed assets + current assets - current liabilities
NOTE: in H.Randall Accounting book, this is a mistake. at pg 213, it states to consider long term liability and debentures in capital employed. But the book forgot to specify that if you are using Capital + long term liabilities to find out capital employed then long term liabilities are considered.If fixed assets + working capital formula is used to calculate capital employed, then long term liabilities are ignored

there fore, = $128,000/$512,000 * 100 = 25%

 

[Mohammed Hassan]

well the link is http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_s03_qp_1.pdf ~~ Q9 pleaseee~~

I keep on getting A as answer, and the mark scheme says that its B? :S
I dont understand why? :S

 

[Jet Nicholos]

EXACCTLY!!! even i got A!! i don know why they are getting B~~!!! urg.. its so annoying. may be its cause its a very old paper.~ ok.. well how do u do OCT/NOV 2003... Q18?? xD the link is http://www.xtremepapers.com/papers/... AS Level/Accounting (9706)/9706_w03_qp_1.pdf and the answer is C~

 

[Mohammed Hassan]

EXACCTLY!!! even i got A!! i don know why they are getting B~~!!! urg.. its so annoying. may be its cause its a very old paper.~ ok.. well how do u do OCT/NOV 2003... Q18?? xD the link is http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w03_qp_1.pdf and the answer is C~

it says that the cost of production is 240000 and so the markup is 20 % so thus as u know the factory profit will simply be 20/100 into 240000 thats 48000.and see ans u may be knowing that provision for unrelaised profit is always deducted to get the correct balance of the factory profit .thus,.....20/120 as markup into 54000 that is 9000 at the year end and at the beginnning as u know it will be 20/100 into 40000 so thats 8000.differnce 1000 increase so 40000-1000 equals 47000...hope u understood...and hey 20/100 in the first year as we cant take 20/120....as decimals...so.....altenative...
copied from parthrocks

 

[shanky631]

EXACCTLY!!! even i got A!! i don know why they are getting B~~!!! urg.. its so annoying. may be its cause its a very old paper.~ ok.. well how do u do OCT/NOV 2003... Q18?? xD the link is http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w03_qp_1.pdf and the answer is C~

hey, dude the answer is B bcoz we won't take into consideration the bank charges bcoz we starting from the bank balance. And it has already been included in it. But if u have taken bank charges into consideration, still the answer can't be A bcoz then it will be -9419.

 

[Mohammed Hassan]

hey, dude the answer is B bcoz we won't take into consideration the bank charges bcoz we starting from the bank balance. And it has already been included in it. But if u have taken bank charges into consideration, still the answer can't be A bcoz then it will be -9419.

Yup! U r right (Y) thnx for the help

 

[Jet Nicholos]

well... i don get why it is 20/120.? and what is provision for unrealised profit? my teacher forgot to teach me that..? thankss.. i get the whole sum.. but don knw this one~

 

[Jet Nicholos]

OHH YEAH!! yes yes.. i remember that rule~!! so.. basically if we start from the cash book balance... u shouldnt take the bank charges! but if ur starting from bank statement balance.. we DO take the bank charges! right ?? xD

 

[wajiman]

EXACCTLY!!! even i got A!! i don know why they are getting B~~!!! urg.. its so annoying. may be its cause its a very old paper.~ ok.. well how do u do OCT/NOV 2003... Q18?? xD the link is http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w03_qp_1.pdf and the answer is C~

more elaborated answer.

the opening stock value given in Balance Sheet as at 31 December 2001 already contains the 20% profit. so we take the 20% from the opening stock which gives us the provision of unrealized profit created last year i.e $8,000. Now the profit is also to be calculated on the closing stock of this year i.e $54,000 * 20/120 = $9,000. so we need to increase the existing provision from $1,000. according to the manufacturing account, the profit included should be $240,000 * 20% = $48,000. but as the provision has to be increased, the profit that will be credited to Profit and Loss account will decrease by $1,000 and hence the answer would be $47,000

 

[shanky631]

OHH YEAH!! yes yes.. i remember that rule~!! so.. basically if we start from the cash book balance... u shouldnt take the bank charges! but if ur starting from bank statement balance.. we DO take the bank charges! right ?? xD

if u are starting from cash book balance, then u have to take into account bank charges.

 

[Jet Nicholos]

but waitt... bank account and cash book balance are the same. Do u mean bank statement??

 

[shanky631]

but waitt... bank account and cash book balance are the same. Do u mean bank statement??

yes bank statement

 

[wajiman]

but waitt... bank account and cash book balance are the same. Do u mean bank statement??

yes they are the same but cashbook does not have bank charges included in it so if we start form cashbook balance, we have to consider bank charges

 

[Jet Nicholos]

THANKS A LOAD. in the same paper... http://www.xtremepapers.com/papers/... AS Level/Accounting (9706)/9706_w03_qp_1.pdf ...... Q17... in the manufacturing account they included the PRODUCTION WAGES in prime cost... but excluded PRODUCTION OVERHEARDS~ isnt the prime cost supposed to include both DIRECT LABOUR AND DIRECT EXPENSES?? xD