Qualification > Commerce
Accounts P3 doubts here
coco pops:
just a couple more questions
oct nov 06- 22 and 23
oct nov 07- 26,27 and 30
oct nov 08- 28
Azhar759:
hi
Nov 2010 Paper 12
28. A manufacturer has 700 units of finished goods in stock on 1 March.
On 31 March the total number of units in stock is 770.
At present, stock is valued using the total costing method.
What would be the effect on the operating profit if the marginal costing method is used for stock
valuation?
A increase operating profit
B no change in operating profit
C no change in operating profit but a 10 % increase in gross profit
D reduce operating profit
Jun 2010 Paper 32
4. X and Y are equal partners. They agree to admit Z as an equal partner.
Z agrees to pay $33 000 for his share of the goodwill.
Goodwill is not to appear in the accounts.
The partnership offices are to be revalued at $60 000 more than their present book value.
What changes are needed in the partners’ capital accounts to record these events?
X Y Z
$ $ $
A + 16 500 + 16 500 ? 33 000
B + 30 000 + 30 000 + 33 000
C + 33 000 + 33 000 + 33 000
D + 46 500 + 46 500 nil
i already know the answers but don't know how to get them..so could i have some workings?
thanks a lot.. :)
Dasith:
--- Quote from: Azhar759 on September 21, 2011, 03:44:21 am ---hi
Nov 2010 Paper 12
28. A manufacturer has 700 units of finished goods in stock on 1 March.
On 31 March the total number of units in stock is 770.
At present, stock is valued using the total costing method.
What would be the effect on the operating profit if the marginal costing method is used for stock
valuation?
A increase operating profit
B no change in operating profit
C no change in operating profit but a 10 % increase in gross profit
D reduce operating profit
Jun 2010 Paper 32
4. X and Y are equal partners. They agree to admit Z as an equal partner.
Z agrees to pay $33 000 for his share of the goodwill.
Goodwill is not to appear in the accounts.
The partnership offices are to be revalued at $60 000 more than their present book value.
What changes are needed in the partners’ capital accounts to record these events?
X Y Z
$ $ $
A + 16 500 + 16 500 ? 33 000
B + 30 000 + 30 000 + 33 000
C + 33 000 + 33 000 + 33 000
D + 46 500 + 46 500 nil
i already know the answers but don't know how to get them..so could i have some workings?
thanks a lot.. :)
--- End quote ---
when total cost is used closing stock is usually valued higher than when marginal costing is used, because marginal costing meathod tends to value stock without taking the indirect expences into consideration.
So if opening stock was 700 units & closing 770 ;
In Trading account :
we
ADD : opening stock (700 units)
ADD : Purchases (we dont know)
less : closing stock (770 units)
this would mean net of (700-770) 70 units of stock were unsold & so needs to be deducted from purchaases to arrive @ cost of goods sold.
When total costing is used a higher amount is deducted as net amount(i.e opening-closing stock) - meaning cost of sales would be very much lower > so profit is higher!
when marginal costing is used the net amount deducted would be much lower meaning the cost of sales is much higher & so profit is lower.
So u hav da ans , its Operating profit would reduce / be lower
When marginal costing is used a lesser amout is deducted as closing stock which means
question 4)
its like this :
Z is a new partner , when he enters the business he pays 33000 as his share of goodwill , in an equal partnership if ones pays 33000 as goodwill 4 his share , we can assume total goodwill is 99000(33000x 3 partners).
so Godwill a/c will be like this :
Dr. Cr.
capital 99000 x 33000
y 33000
z 33000
Capital a/c
Dr. Cr.
Cash z 33000(he agreed to pay for goodwill)
Godwill z 33000 Godwill x 49500
y 33000 y 49500
x 33000
Revaluation x 30,000
y 30,000
Balance c/d X 46500
y 46500
z (nothing)
Ans is D
lastgift:
^ Dasith you solved all the questions (theres so much text, don't feel like reading it:p )?
Or I can sove if Any are left, too bored? :D
Dasith:
--- Quote from: lastgift on November 04, 2011, 02:20:23 pm ---^ Dasith you solved all the questions (theres so much text, don't feel like reading it:p )?
Or I can sove if Any are left, too bored? :D
--- End quote ---
XD , those were the times when i had exams .... those questions were da only things that made me revise :P ,
Ohh great ! i could take a break ;)
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