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Economics, Accounting & Business: Post your doubts here!

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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~
 
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for question no.8:

as the share have a face value of 5andpremiumof5 and premium of 15, we will multiply the no.of share with 20,50,00020, 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 300,000liabilityisincreasingandontheotherhadcashincurrentassetsisalsoincreasingby300,000 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, = 128,000/128,000/512,000 * 100 = 25%
 
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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
 
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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.
 
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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 :)
 
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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~ :D :D
 
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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
 
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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.Nowtheprofitisalsotobecalculatedontheclosingstockofthisyeari.e8,000. Now the profit is also to be calculated on the closing stock of this year i.e 54,000 * 20/120 = 9,000.soweneedtoincreasetheexistingprovisionfrom9,000. so we need to increase the existing provision from 1,000. according to the manufacturing account, the profit included should be 240,00020240,000 * 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 1,000andhencetheanswerwouldbe1,000 and hence the answer would be 47,000
 
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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.
 
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