Qualification > Commerce

Accounts P3 doubts here

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coco pops:
could any1 help me with maybe june 06
question 2
thank you

Dasith:
wat u gotta do here is :

u knw the cash rec from issue of shares , i.e 10000 x 20 =200 000 ....
& the cash we pay for debentures is 156 000 & they say it includes interst of 6 months @ 8% per annum. We knw that the interest thing dosent come under financing part yea?

so wat wee need to do is take that interst out !
8 % for 1 year means its 4 % for 6 months (8 x 6/12)

so this 156000 includes a 4 % interst to find only the amount paid for debentures wat we do is :

156000 / 104 x 100 =150000 yea ?

soo we recieve 200000 & pay 150000
deff = 50000
got it ?

coco pops:
ah thanks a lot dude..i just wasnt calculating the interest rite
thanks agn

coco pops:
may june 09  (paper 3)
question 4 please

Dasith:

--- Quote from: coco pops on June 05, 2011, 12:25:05 pm ---may june 09  (paper 3)
question 4 please

--- End quote ---

np , & u r welcome :D

Q 4)

ok here the company redeems 200 000 shares @ premium of 10%
& its partly financed by issue of 50000 shares @ 3.50

wat u need to knw here is CRR is created to protect the creditors i.e done by turning revenue reserve into capital reserve.

since 200 000 were redeemed ,this amount (amount of share capital shuld be replaced by CRR ) , but as u knw its already financed by issue of shares worth  @ par 100,000 & then share premium increases by (1.5 x 50000 ) 75000 ,
 so as u can see here the loss of 200000 was now replaced by capital of 100000 & capital reserve(share premium) of 75000. & wat we lack is another capital reserve of 25000 i.e CRR .To cover up the initial cost.
The CRR is created by converting a part of revenue reserve (such as retained profit , general reserve etc ) & of course the Premium on redumption is aloso charged to profits , but that part is not asked in the question .

ans is A >

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