help in accounting paper 3 plz

[Monica]

No Bani dont worry girl...ur a very helpful person keep it up!! here is a +rep for u!!

[7ooD]

hehe thanks umm do u have any link for definitions and uses of relevance comparability reliability understandability cuz i dnt have them in my book  lol i asked many questions sry

[Monica]

ya there r many websites...go to godfather thread which is called notes and go to the website cliffnotes and type accounting....

and no its really ok ask as much questions as u want it really helps us too!!

[Monica]

http://www.cliffsnotes.com/WileyCDA/

here i got it from godfather thread!! u should go and +rep him!!lol!!

[7ooD]

thanks sherif hey man r u egyptian it is relly confusing to kno nationalities on here

[Monica]

hahahaha!! oh my god 7ood!! see its not sherif its MONICA BAS ANA i changed my name to sherry....lol!!

[Nanavel]

There is something i dont understand in Trading and profit and loss account of year  O/N/2006  >> the First Question ...

It is about the Depriciation of the Equipment we have to use to the reducing balance method but why we reduced it for 3 years ..

5000 x 10% = 500
5000 - 500 = 4500

4500 x 10% = 450
4500 - 450 = 4050

4050 x 10% = 405  >>> why did they chose this number ?

Question : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_qp_3.pdf
Markscheme : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_ms_3.pdf

---------------------------------------------------------------------------------------------------------------------------
Can someone please teach me the Role of Provision of doubtfull debts in the profit and loss account as well as Balance sheet . What do we do when doubtfull is given ?? and how does it works with Bad debts ??


Thankyouuuuu

[saiki]

1. about the depreciation- it says in trial balance that until now 950 has been charged alredi... so u do (5000-950)*10% = 405
2. provision for doubtful debts is just a mere book entry- no cash transaction takes place- if in the year is 100 n at the end u decide to change it to 150 due to increased bad debts- in pnl u expense 50 (if it deccreases to 90 from 100, then u revenue 10 in pnl). its just as if ur keeping that amount aside. in balance sheet, u reduce the debtors amount by the provision of doubtful debts. (if its 150 provision, n debtors is 10000, then u do = debtors 10000-provision for doubt 150 = net debtors 9850...
3. bad debts is when u have a transaction. money value changes. if u incur bad debts, it means u lost that money the debtor owed u. so that amount goes in pnl as expense n close the bad debt a/c for that period (make it 0 n transfer everythin to pnl) n nothing happens in balance sheet.

hope u understand

[Nanavel]

Thankyou very much ... I really got it now .. (+rep ) for you ..
you are awesome !

but what about Bad debts recovered ?? I know that we have to add it to the GrossProfit in Trading accouting  but does it has another use .. like in balance sheet or reducing it from anything else
-------------------------------------------------------------

In the Year O/N/06 .. Page 10 - question 3 - part c :

why they didnt use the Additional information why did then even keep it ??

Question : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_qp_3.pdf
Markscheme : http://www.freeexampapers.us/IGCSE/Accounting/CIE/2006%20Nov/0452_w06_ms_3.pdf

[saiki]

bad debt recovered- whenever u add somefin in bad debt recovered, the double entry is to add in debtors a/c also... it just opposite of bad debts a/c... bad debt= reduce gp, bad debt recov= increase gp... nothing in balance sheet...

n about the additional info 2, its just to trick u... if they asked for income n expenditur a/c, then u use it... since its recipt n payment u dont... because RnP is similar to cash bk where u dont take into a/c accruals n prepayments, in InE is similar to PnL where u do take them into a/c...

[Nanavel]

Thankyouuu ..

In Motor vehicle >> provision for depriciation of motor vehicles account >> Disposal of motor vehicle account

What are the Essential steps required to solve this ...  in the year O/N/2006 page 12 and 13 and 14 .

Actually , I didnt had a teach from a very long time just the past four months of my IGCSE she came and she tought me the very little and totally Escaped the These parts that i am asking right now ..

It is going to be very hard for me as i have both accounting and chemistry to study them on the same day ..

Saiki you could talk to me Online if you wish .. "

[saiki]

Motor vehicle- u add the vehicles u buy, n the day ur sellling it, u remove that vehicle from that a/c (at cost price) as if it never existed - this u add in disposal...

Provision- u add provision every year for all vehicles. n when ur selling one of them, again remove all traces of that vehicle (remove the depn charged for it for all years) - this u add in disposal... ( n dont forget to charge depn for remaining vehicles at the end of that year.)

disposal- add motor vehicle cost, add depn, balance of that will be the net book value... then enter the selling price n if its above the balance then u made profit in the book or else made loss in the book... then transfer the balance to pnl n close that a/c (make it 0)

[frenzy1234]

*censored* hell accounts and chem tommorow chem is fine but a/c im screwed!!
sm1 please help me with the entries of good will pls!!
 

[Nanavel]

Motor vehicle- u add the vehicles u buy, n the day ur sellling it, u remove that vehicle from that a/c (at cost price) as if it never existed - this u add in disposal...

Provision- u add provision every year for all vehicles. n when ur selling one of them, again remove all traces of that vehicle (remove the depn charged for it for all years) - this u add in disposal... ( n dont forget to charge depn for remaining vehicles at the end of that year.)

I didnot understand it >> could you please do it with examples or use the question in the paper Page 12 ..

how did they get the 9000 as a balance in the provision for depreciation in Page 13 year O/N/06 .. what is the formula ??

what are the formula's used in these ??

[saiki]

Motor vehicle-
oct 1 2004 bought 2 vehicle (20000 n 16000) hence debit motor vehicle a/c since asset increase.
sept 30 2005 depreciate the 2 vehicles- 25% of 20000 + 25% of 16000 = 5000+4000=9000 -> credit since negative asset a/c

disposal->

remove vehicle VWU from motor vehicle a/c -> credit 16000 (the cost of that car)
remove prov depn -> remove 4000 from the a/c since until now the total dep charged is 4000 for that car... debit 4000

enter both of them in disposal a/c-> debit 16000, credit 4000, hence balance is 12000 dr which is net book value...

then it is sold at 12500 hence credit 12500 n balance now is 500cr, n since sold higher then NBV, it is a profit.

then at end of year, transfer the balance of the a/c to pnl n close disposal a/c (make it 0)....


also at the end of year, dont forget to charge depn in provision for depreciation a/c for the remaining vehicle KUA at 25% of cost =5000


hope thats more clear