Economics, Accounting & Business: Post your doubts here!

lxelle · May 9, 2015

azaanahsan could you pleasse do adjustment for the answer of question2B a) of http://onlineexamhelp.com/wp-content/uploads/2012/06/9706_s11_ms_41.pdf? I feel that the whole balance sheet answer on the marking scheme is wrong. D:

asadalam · May 9, 2015

What does it mean when we say that exchange rate must be within domstic opportunity cost ratios in comparative advantage? Why does it need to be like that?

Sana Adnan Qamar Baloch

Sana Adnan · May 9, 2015

asadalam said:
What does it mean when we say that exchange rate must be within domstic opportunity cost ratios in comparative advantage? Why does it need to be like that?

Sana Adnan Qamar Baloch

asadalam
The statement "exchange rate must be within domestic opportunity cost ratios " is one of the ASSUMPTIONS on which the theory of Comparative Advantage is based on. The comparative advantage theory says that countries should specialize in goods in which they have minimum opportunity cost. This will make the trade mutually beneficial and will enable both the trading partners to consume beyond their PPC.
That said, when we talk about trade being mutually beneficial, we assume that the exchange rate which is being used for the international transaction justifies the opportunity costs of producing of the traded goods. This is because, exchange rates in real scenario can impact the cost of producing a good and if we ignore this assumption, the trade will in NOT be mutually beneficial and the comparative advantage theory will become useless.
Therefore when we use comparative advantage theory in deciding about goods in which to specialize we assume:
1. exchange rate must be within domstic opportunity cost ratios
2. There are no transport costs being charged
3. There are no trade barriers
etc.
Of course most of these assumptions do not hold validity in real terms.

azaanahsan · May 9, 2015

lxelle said:
azaanahsan could you pleasse do adjustment for the answer of question2B a) of http://onlineexamhelp.com/wp-content/uploads/2012/06/9706_s11_ms_41.pdf? I feel that the whole balance sheet answer on the marking scheme is wrong. D:

No Marking scheme is correct

See lets start with share capital ....
Share capital in beginning was 600,000 then u issued shares for 20,000 So it became 620,000
Redeemable shares are redeemed so they will not come now.

Now share premium...

In start share premium was 20,000. When we redeemed Shares at premium 5000 will be paid from share premium becoz these shares were issued at premium of 10,000 previously. Now new shares are also issued so premium on new shares which is 12,000 (20,000 * 0.60) will be added. So share premium will be (20-5+12)

Now capital redemption reserve...
Capital redemption reserve will be created for par value left after paying from issue of new shares, total we have to pay 50,000 for Redeemable shares out of that 32000 will be paid from Issue of shares remaining 18,000 we will create CRR.

Retained earning will be (150 - 18)

Net Assets will be (820 - Cash paid(55) + Cash Rec. (32))

I hope u understood....

asadalam · May 9, 2015

Sana Adnan said:
asadalam
The statement "exchange rate must be within domestic opportunity cost ratios " is one of the ASSUMPTIONS on which the theory of Comparative Advantage is based on. The comparative advantage theory says that countries should specialize in goods in which they have minimum opportunity cost. This will make the trade mutually beneficial and will enable both the trading partners to consume beyond their PPC.
That said, when we talk about trade being mutually beneficial, we assume that the exchange rate which is being used for the international transaction justifies the opportunity costs of producing of the traded goods. This is because, exchange rates in real scenario can impact the cost of producing a good and if we ignore this assumption, the trade will in NOT be mutually beneficial and the comparative advantage theory will become useless.
Therefore when we use comparative advantage theory in deciding about goods in which to specialize we assume:
1. exchange rate must be within domstic opportunity cost ratios
2. There are no transport costs being charged
3. There are no trade barriers
etc.
Of course most of these assumptions do not hold validity in real terms.

So its like saying we need trade to be beneficial and this can only be true if exchange rate is suitable i.e between the domestic oc ratios otherwise they might face a loss. Right? And how to find if exchange rate does indeed lie between the oc ratios? Can you please quote an example? Thanks a lot

job wilson · May 9, 2015

Sana Adnan said:
job wilson
http://www.gceguide.com/search/label/AS & A Level : Accounting (9706)

Thanks sana ..god bless u

Lipstick Spoiler · May 10, 2015

Ram97 said:
Look drawings were 400/month so that would be 4800/year
then cash takings banked would be total -4800 and debited u had balance c/d and b/d and that made 4700 sth

In departmental account question on what bases did u allocate power??Kilowatt hours rit??

Lipstick Spoiler · May 10, 2015

Deaddeamon said:
How did it go people? Hope it went well!
btw
was there a profit or a loss in the income statement?

Well,it was a loss in the income statement!!

Lipstick Spoiler · May 10, 2015

Ram97 said:
yeah i know that credit and cash sales were given but shouldnt be cash sales banked added too?
The name's Rameez not Ram

Yeah we jst had to add the Cash and credit sales that's it..!

Lipstick Spoiler · May 10, 2015

I got no time to solve that Last question Invoice making...doti

Saad Rashid said:
How much was the loss in income statement ?? and did u guys get under absrrption for both machining and assembly (I dont remember it ws assembly or finishing) ? Was the invoice value 4391?

Was it under Absorption in all 4?I mean in finishing i got both under absorbed bt in machining i got 1 under absorbed nd 1 over absorbed...!!!

newgirl007 · May 10, 2015

azaanahsan said:
they have used rounded figure 6.90... but i think ur answer is also acceptable....

thanks

newgirl007 · May 10, 2015

Hey guys,
I'm doing my AS level now... In accounting, Paper 1... there are always questions on shares and I have no clue on how to go about the questions. I'm really not comfortable with shares related questions but sadly its very important. Can somebody please give me tips on how to do the calculations? Also, please help me know all the points related to shares I need to remember in every situation... Somewhat like in the form of steps? I would really be very grateful to anyone who helps me out

Thanks in advance!!! and all the best to all the candidates ^_^

Sana Adnan · May 10, 2015

asadalam said:
So its like saying we need trade to be beneficial and this can only be true if exchange rate is suitable i.e between the domestic oc ratios otherwise they might face a loss. Right? And how to find if exchange rate does indeed lie between the oc ratios? Can you please quote an example? Thanks a lot

asadalam
Please go through my notes summary on International Trade in the attached file. It will help you understand how opportunity cost ratios and Terms of Trade are used to make trade decisions. Remember, at this level we are only studying the concept assuming a two-commodity two-economy model. This however is not the case in real life. In reality countries trade in multiple commodities and with multiple countries. In that case Laspeyres Index is used which is not part of your syllabus so just keep things simple for yourself. Check the attached file and let me know if there is a confusion.
Regards

asadalam · May 10, 2015

Sana Adnan said:
asadalam
Please go through my notes summary on International Trade in the attached file. It will help you understand how opportunity cost ratios and Terms of Trade are used to make trade decisions. Remember, at this level we are only studying the concept assuming a two-commodity two-economy model. This however is not the case in real life. In reality countries trade in multiple commodities and with multiple countries. In that case Laspeyres Index is used which is not part of your syllabus so just keep things simple for yourself. Check the attached file and let me know if there is a confusion.
Regards

So if the OC for tractors is 0.25 for China and 10 for japan,and the OC for Computers is 0.1 for Japan and 4 for China,what would be the most suitable exchange rate bw the countries?Thats what i am asking?
If China specialises in Tractors and Japan in Computers then should the Exchange rate be 0.25 Chinese Yuan for 0.1 Japanese Yen?

Sana Adnan · May 10, 2015

asadalam said:
So if the OC for tractors is 0.25 for China and 10 for japan,and the OC for Computers is 0.1 for Japan and 4 for China,what would be the most suitable exchange rate bw the countries?Thats what i am asking?
If China specialises in Tractors and Japan in Computers then should the Exchange rate be 0.25 Chinese Yuan for 0.1 Japanese Yen?

Dear that is what I am trying to tell you. Why are you digging to find out how to set exchange rates. That is NOT part of your course. You just need to know the theoretical application

Emadthegreat · May 10, 2015

newgirl007 said:
Hey guys,
I'm doing my AS level now... In accounting, Paper 1... there are always questions on shares and I have no clue on how to go about the questions. I'm really not comfortable with shares related questions but sadly its very important. Can somebody please give me tips on how to do the calculations? Also, please help me know all the points related to shares I need to remember in every situation... Somewhat like in the form of steps? I would really be very grateful to anyone who helps me out Thanks in advance!!! and all the best to all the candidates ^_^

u should know about share capital (ordinary)
abt capital employed etc
tell me the terms or questions
ill help ya coz idk how to start

Ram97 · May 10, 2015

http://studentbounty.com/pastpapers/Cambridge International Examinations (CIE)/International AS and A Level/Accounting (9706)/2005 Jun/9706_s05_qp_1.pdf
MCQ #4 and #5

newgirl007 · May 11, 2015

Emadthegreat said:
u should know about share capital (ordinary)
abt capital employed etc
tell me the terms or questions
ill help ya coz idk how to start

Hey thanks for offering your help

So ya... I do know what share capital is... Also capital employed ... ROCE.. Share premium...etc... Basically, I know most of the concepts theoretically but I have no clue on how to apply what concept in the papers. I freeze when I see shares related questions.

It would be of great help if, As per your convenience, you can choose any 3 different questions from the past papers... different way to record the transactions and explain them to me. My teacher is off on a holiday and is not reachable so I'm in a fix and I have my MCQ paper on 13th of this month :O
Thanks again for your help.!

newgirl007 · May 11, 2015

guys.. anyone knows any website where we get SOLVED past papers??? Lemme know ASAP please!!

moiz warraich · May 11, 2015

Business and Economics guess paper will be posted tonight.

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Economics, Accounting & Business: Post your doubts here!

lxelle

asadalam

Sana Adnan

azaanahsan

asadalam

job wilson

Lipstick Spoiler

Lipstick Spoiler

Lipstick Spoiler

Lipstick Spoiler

newgirl007

newgirl007

Sana Adnan

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