Economics, Accounting & Business: Post your doubts here!

[00mfr]

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%

oh so its the books fault, makes me feel good
thanks alot (Y)

 

[00mfr]

8 - the answer is 50000*20 = 1000000
Net assets = TA - TL.
the nominal value of shares is 5 buh they're issued "at a premium of 15" so total value of issue is $20. Debentures wouldnt make any impact

19 - answer is D
ROCE = (PBIT/capital employed)*100
so (128000/512000)*100 = 25%
512000 = (Noncurrent assets + net current assets)

thnk u (Y)

 

[00mfr]

the pages of doubts are increasing, the pressure is rising, we think that we are forgetting stuff but keeping all that aside i wish evry1 the best of luck especially those doing two like me (*facepalm*), and like always also wish the grading thresholds are low

 

[student92]

30 A company manufactures one product. Variable costs are $600 000. Fixed costs are $300 000.
If it bought the product from another supplier, it could use existing machinery to make a total
contribution of $400 000. Fixed costs would not change.
What is the maximum price it should pay to obtain the product from another supplier?
A $600 000 B $700 000 C $900 000 D $1 000 000
correct answer is d
please explain how

 

[umarFM]

Awesome explanation my friend!

thnx..

 

[sana1421]

A balance sheet shows the following information.
$
100 000 ordinary shares of $0.50 each 50 000
50 000 5 % preference shares of $0.10 each 5 000
share premium 10 000
revaluation reserve 20 000
retained earnings 35 000
120 000
What is the balance sheet value of one ordinary share?
A $0.50 B $1.00 C $1.15 D $1.20

how is the answer C please help ?

 

[umarFM]

A balance sheet shows the following information.
$
100 000 ordinary shares of $0.50 each 50 000
50 000 5 % preference shares of $0.10 each 5 000
share premium 10 000
revaluation reserve 20 000
retained earnings 35 000
What is the balance sheet value of one ordinary share?
A $0.50 B $1.00 C $1.15 D $1.20


anser in C.....balance sheet value or book value = (shareholders fund/no. of shares)
shareholders fund is ORDINARY shares plus Reserves (50000+10000+20000+35000=115000)
so balance sheet value of one ordinary share = 115000/100000 = $1.15

 

[Somia uddin]

any strong dua to speed up my mind

 

[student92]

A balance sheet shows the following information.
$
100 000 ordinary shares of $0.50 each 50 000
50 000 5 % preference shares of $0.10 each 5 000
share premium 10 000
revaluation reserve 20 000
retained earnings 35 000
120 000
What is the balance sheet value of one ordinary share?
A $0.50 B $1.00 C $1.15 D $1.20

how is the answer C please help ?

add ordinary shares , share premium, revlauation reserve, retained earnings , you will get 115 000
number of ordinary shares is 100 000
and so you will get 1.15, insha allah

 

[sana1421]

add ordinary shares , share premium, revlauation reserve, retained earnings , you will get 115 000
number of ordinary shares is 100 000
and so you will get 1.15, insha allah

thanks

 

[student92]

your welcome

 

[sana1421]

http://www.xtremepapers.com/papers/...AS Level/Accounting (9706)/9706_w10_qp_11.pdf

q3 please help

 

[Mohammed Hassan]

Best of luck to everyone having exams tomorrow!

 

[wajiman]

http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w10_qp_11.pdf

q3 please help

here is the solution:
create the asset accout:

debit b/d $460 000
addition $92 000
total = $552 000

Credit side
Disposal (balancing fig.) $47 000
balance c/d $505 000
total = $552 000

now create provision for depreciation account:

Debit side:

Depreciation on the disposal account ( 47 000 - 16 000) = $ 31,000
balance c/d $237 000
total = $ 268 000

credit side:
balance b/d $ 215 000
Profit and loss( balancing figu.) $53 000
total = $ 268 000

well guys good night from me, gotta sleep now and best of luk to all

 

[umarFM]

http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Accounting (9706)/9706_w10_qp_11.pdf

q3 please help

anser is C...... opening net book value - disposals + additions - closing book value = depreciation
245000 - 16000 + 92000 - 268000 = 53000....

 

[mimiswift]

Yeah i called it darling because without her i cant get good grade!

i see
even with it i feel like i can't get good grades!

 

[mimiswift]

Dont know what has happened to me!
my mind is blank!
I think i am forgetting every concept of Economics!
I dont know why this is happening to me!!

OMG
same here i just finished revising and i feel like i forgot everything!

 

[sana1421]

here is the solution:
create the asset accout:

debit b/d $460 000
addition $92 000
total = $552 000

Credit side
Disposal (balancing fig.) $47 000
balance c/d $505 000
total = $552 000

now create provision for depreciation account:

Debit side:

Depreciation on the disposal account ( 47 000 - 16 000) = $ 31,000
balance c/d $237 000
total = $ 268 000

credit side:
balance b/d $ 215 000
Profit and loss( balancing figu.) $53 000
total = $ 268 000

well guys good night from me, gotta sleep now and best of luk to all

thanku so much

 

[sana1421]

anser is C...... opening net book value - disposals + additions - closing book value = depreciation
245000 - 16000 + 92000 - 268000 = 53000....

thanks a lot

 

[WaleedUQ]

30 A company manufactures one product. Variable costs are $600 000. Fixed costs are $300 000.
If it bought the product from another supplier, it could use existing machinery to make a total
contribution of $400 000. Fixed costs would not change.
What is the maximum price it should pay to obtain the product from another supplier?
A $600 000 B $700 000 C $900 000 D $1 000 000
correct answer is d
please explain how

its a very easy question my friend.
D is the answer.
just add contribution and v.c