IGCSE/GCSE/O & A Level/IB/University Student Forum
Qualification => Subject Doubts => GCE AS & A2 Level => Commerce => Topic started by: ***exam*** on May 13, 2010, 10:29:58 pm
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There are very less people taking acc and even lesser who can solve doubts
so i decided make this thread so that all acc doubts can be posted here and its easy for everyone to locate.
cuz many small threads here and there makes it difficult to locate and creates more mess in sf
i hope all doubts are posted here !!!!
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ya , i agree :D :D :D ;D
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Q1) net asset = fixed asset + current asset -current liability
if the question got long-term liability, do we need to deduct to get net asset?
Q2) Can someone explain Provision for unrealised profit and factory profit ? About the double entry and how its put on profit and loss a/c , balance sheet
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Q1) net asset = fixed asset + current asset -current liability
if the question got long-term liability, do we need to deduct to get net asset?
Q2) Can someone explain Provision for unrealised profit and factory profit ? About the double entry and how its put on profit and loss a/c , balance sheet
Provision for unrealised profit
-Be made on the closing stock valued at production cost plus a percentage of factory profit.
-Provision for unrealized profit = Mark up% / 100%+ Mark up(%)
Check the file attached it is explaining the Manufacturing account lesson PERFECTLY. You will find full explanation there for Provision for unrealized profit.
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Q1) net asset = fixed asset + current asset -current liability
if the question got long-term liability, do we need to deduct to get net asset?
Net assets = Total assets - total liabilities of an individual or company.
So, yes to your question, we need to deduct the long term liability.
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Cn any1 give standard format for absorption costing... because different questions in past papers regarding this topic, da MS haz solved it wit varying format/
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@mony : Thanks although i knew manufacturing acc but the ppt was a great revision
and absorption costing i dont understand it at all is there any reference material to learn about it
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When we calculate OAR how do we find the Budgeted overhead if thequestion is not given directly but they give the variable production overhead, fixed production overhead, fixed selling and administrative expenses.
Which one do we include ? and why include and not include?
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i think only variable production overhead and fixed production overhead are taken into acc but m not sure ??? lets wait 4 others to answer :)
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immortal do you know why only include fixed and variable production cost but not the sellind and administrative overhead?
I will post the format later..
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The upper part as usual normal p/l account but at thelast part before you get your net profit you have to less under-absorption of fixd overhead or add over-absorption of fixed overhead.
Remember absorption costing is based at full cost.
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Questions again. Pls explain.Thanks.
Q1) When we calculate OAR how do we find the Budgeted overhead if thequestion is not given directly but they give the variable production overhead, fixed production overhead, fixed selling and administrative expenses.
Which one do we include ? and why include and not include?
Q2)At the year-end a cash book shows a credit balance of $4800.
The bank statement included bank charges of $25 which had not been included in the cash book.
Cheque payments entered in the cash book before the year end to the value of $250 had not yet
cleared the bank.
How would the bank balance be shown in the balance sheet?
Ans: current liability $4825
Q3)The wages of staff employed in manufacturing goods have been debited in the profit and loss
account.
What is the effect of this error?
Ans: gross profit -overstated ; net profit- no effect
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Q2) Wen u reconcile da cash book wit da bank statement, da up-2-date cash book will show -4800-25=4825(CL).
While da bank reconciliation statement wit da bank statement bal of (-)4550 will decrease by 250.
Q3) The wage should b charged in a manufacturing a/c, not da P&L.
Due 2 da error Maun a/c is overstated(production cost) thus G/P is overstated.
regardless of where da expense is shown,it wont effect da final profit N.P.
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hey guys got a question In the ratio chapter are the gearing ratios in syllabus of 2010 in a AS level.
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hey man..i was just goin thru this site and sum threats and i found this...i am actually really glad that i found this threat because i need help in accounts...i am not bad at it...bt at times i forget certain things....i can do the past papers...bt i take time...a lott of timee..and can u help plss...can u like suggest wt i should practice inorder to get speed and perfection at this subject...plss..thankzz (i hope i get a quick replyy)
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hey guys got a question In the ratio chapter are the gearing ratios in syllabus of 2010 in a AS level.
not there its only for A level
hey man..i was just goin thru this site and sum threats and i found this...i am actually really glad that i found this threat because i need help in accounts...i am not bad at it...bt at times i forget certain things....i can do the past papers...bt i take time...a lott of timee..and can u help plss...can u like suggest wt i should practice inorder to get speed and perfection at this subject...plss..thankzz (i hope i get a quick replyy)
even m slow at solving the only way out i find is timing and solving past paper !!!
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Cn any1 give standard format for absorption costing... because different questions in past papers regarding this topic, da MS haz solved it wit varying format/
Statement of total cost (Absorption) :
Direct Materials
Direct Wages(labour)
Direct expenses
Prime Cost
Factory overheads costs all fixed and variable > Indirect labour
> Indirect Materials
> Depreciation (factory)
> Other indirect expenses
(Including rent of factory, heat & light)
Total cost of production
Office overhead costs > Selling expenses (all fixed)
> Administrative expenses
Total costs
This is how it is in my notes.
Check this also : http://www.stamfordonline.com.my/courses/des/des2204/DES%202204%20Chapter%206.pdf
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http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2008%20Nov/9706_w08_qp_2.pdf
this paper Q3 c) u need production variable cost to solve how do u get it ??
Thanks Mony
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hey guys got a question In the ratio chapter are the gearing ratios in syllabus of 2010 in a AS level.
They say it is not there in the syllabus but you may find it in paper 1 I think. Just in case do know it, it is not hard.
{Fixed cost capital}/{total capital} x 100 = {Loan+preference shares}/{laon+pref+ord.shares+reserves} x 100 = xxx%
hey man..i was just goin thru this site and sum threats and i found this...i am actually really glad that i found this threat because i need help in accounts...i am not bad at it...bt at times i forget certain things....i can do the past papers...bt i take time...a lott of timee..and can u help plss...can u like suggest wt i should practice inorder to get speed and perfection at this subject...plss..thankzz (i hope i get a quick replyy)
Revise each topic and make sure you know the format very well, then keep practicing pastpapers. That's all and you will get a good grade.
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http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2008%20Nov/9706_w08_qp_2.pdf
this paper Q3 c) u need production variable cost to solve how do u get it ??
Thanks Mony
Okay, I will solve tom it is not hard. I gtg now, it is late.
No worries. =]
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http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2008%20Nov/9706_w08_qp_2.pdf
this paper Q3 c) u need production variable cost to solve how do u get it ??
Thanks Mony
da variable cost includes direct material & labour cost.It shud b calculated on da current years production.
Dat is Sales+Cl stock-Op stock
den da constant fixed cost is added
As this is absorption costing da unit price wen calculating Op/Cl stock will include fixed cost.
==Der is a another method 2 calculate & solve this using over/under absorption,which haz different format.
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ya immortal. you are right. Look at d format i gave
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Questions . It was hard pls help. :'( :'(
Q1)The standard material specification for a unit of production is 2 kg costing $7.50 per kilo.
Budgeted production for a period was 600 units, actual production was 620 units. The actual
material cost of purchasing 1200 kilos was $9400.
What was the material price variance?
Ans: $100 adverse
my working:
(sp-ap) *aq
(7.5 - 9400/1200) *1200
$400 (A) ?
Q2)Discounting methods have been used to evaluate an investment project over a three year life.
The project will produce annual net inflows of $2 m.
$500 000 of the initial investment can be recovered at the end of the third year.
Discount factors at 10 % are:
year factor
1 0.91
2 0.83
3 0.75
What is the present value of project cash inflows?
Ans: $5.36 m
my working:
year 10% NCF PV
0 1 (500k) (500k)
1 0.91 200k 1820k
2 0.83 200k 1660k
3 0.75 200k 1500k
Q3)A company has the following capital structure:
50 000 ordinary $10 shares 500 000
1 000 000 5 % convertible loan stock 1 000 000
One half of the loan stock holders converted at the rate of three new ordinary shares of $10 each
per $100 of loan stock.
How many new ordinary shares were issued?
Ans: $15 000
complete dont understand loan change to ordinary share or vise versa.
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Questions . It was hard pls help. :'( :'(
Q1) cost of material as per flex budget =7.5*2*620=9300
material price variance=flex-actual
=9300-9400=$100(A)
Q2)inflow for investment=(0.91+0.83+0.75)*2000000
=4980000 (same as ur ans)
investment recovered =500000*0.75=375000
present value=4980000+375000=5.355m
3)half of stock =$500000
As 4 each $100 v get 3 shares, so 500000/100*3=15000 shares
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da variable cost includes direct material & labour cost.It shud b calculated on da current years production.
Dat is Sales+Cl stock-Op stock
den da constant fixed cost is added
As this is absorption costing da unit price wen calculating Op/Cl stock will include fixed cost.
==Der is a another method 2 calculate & solve this using over/under absorption,which haz different format.
oh ya Thanks :)
is it like
profit per mc + o/h in closingstock - o/h in opening stock ??
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the question pastyear asked are from paper 3 right ???
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ya P3
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Thanks immortal ;D ;D
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Question again . Pls explain
Q1) A company manufactures four products using different quantities of the same material, which is in
short supply. The following data is given by $ per unit:
Product Y1 Y2 Y3 Y4
Selling price 64 68 84 100
Materials, $6 per kg 18 24 27 30
Production costs 37 30 36 33
Profit 9 14 21 37
Machine time per unit
(in minutes) 45 30 40 30
The production costs include fixed costs which have been absorbed using a machine hour rate of
$36.
Which product gives the most profitable use of the raw materials?
Ans: Y1
Q2)The sales budget shows monthly sales of 300 units for July and 600 units for August. Stock at the
start of a month is budgeted to be 50 % of the month's planned sales. 10 % of production in a
month is faulty.
What is the actual production quantity for July to achieve the budgeted sales?
Ans: 500 units
Q3) A company has issued a debenture loan carrying interest at the rate of 8 % payable every
31 December. Also, each 31 December $20 000 of the debenture is redeemed.
At 31 December 2005 the total debenture loan outstanding was $100 000.
Which amounts should be disclosed in the company’s published Balance Sheet at
31 December 2006?
Ans: accrued interest $nil
current liabilities $20 000
long term loan $60 000
Question complete dont know how to do but question 3 abit.
Q3 dont the accrued interest and current liabilities how to get.
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help anyone?
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ok
;D ;D ;D
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sorry no idea
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machine hours ratio=0.75:0.5:2/3:0.5
To find da most contributing product, deduct fixed costs of Fixed costs as per ratio
Overhead/machine hours=36
36*0.75=27
36*0.5=18
36*2/3=24
36*0.5=18
Product Y1 Y2 Y3 Y4
contribution 36 32 45 55
Contribution per
material 2 1.33 1.67 1.23
Now rank dem.,
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G2G,b bak in 30min & solve da rest
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ok ;D ;D
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@pastyear: congrats on 100th post :P
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thanks.
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immortal, refer to the question that you did before you go Q1,
1) how to find the machine hours ratio?
2) what do you mean by deduct fixed costs of Fixed costs as per ratio?
3) Why do we do this?
36*0.75=27
36*0.5=18
36*2/3=24
36*0.5=18
4) How to get the contribution of 36 ,32, 45 , 55?
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2)50% of July's % August's is needed to b produced.
dat is 150+300=450
as 10% of production is faulty 450/0.9=500 is needed to b produced as as 450 will b available.
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immortal, refer to the question that you did before you go Q1,
1) how to find the machine hours ratio?
2) what do you mean by deduct fixed costs of Fixed costs as per ratio?
3) Why do we do this?
36*0.75=27
36*0.5=18
36*2/3=24
36*0.5=18
4) How to get the contribution of 36 ,32, 45 , 55?
O.A.R=overhead/machine hours
OAR is given as $36, so find overhead
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where does this come from 0.75:0.5:2/3:0.5
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where does this come from 0.75:0.5:2/3:0.5
these r da machine hours in Hours not min.45min=0.75hr
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how about d Q3?
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guys i am in serious trouble...can any1 help me out with accounts...ive done all past papers from 2001 to 2009...bt i still feel very nervous abt accounts...actually i dont rember wt 2 do at times...can any1 advise somthing plss?
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p.s: friends i did this whole paper...finshed it easily...bt only one quection had me stuck...it may be thie easiest...bt i coudnt find the answer...can any boy tell me 1 1st answer...the one mark quection of this paper
http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2005%20Nov/9706_w05_qp_2.pdf
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Draft a balance sheet.
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as in...wht do i do 2 get the bank balance?
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Put it as a missing figure. Then work backward.
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kk...will try it...bt r u sure thats da only way...there is no other way 2 do dat yeh..?? thankz man..and wt must i do..2 get rid of the fear of accounts? if u could suggest
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It's the easiest way I find possible.
Remember the equation, it will simplify things:
Assets = Capital + Liabilities
What the business owns = What owner has brought in + What it borrowed
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skywalker112233 , i think you can help me explain my accounting doubts that i posted to test your skills
Thanks
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we seriously need an angel in this thread !! :(
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I'll b happy, 2 clear any doubts, 2 da best of ma knowledge..
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immortal, refer to the question that you did before you go Q1,
1) how to find the machine hours ratio?
2) what do you mean by deduct fixed costs of Fixed costs as per ratio?
3) Why do we do this?
36*0.75=27
36*0.5=18
36*2/3=24
36*0.5=18
4) How to get the contribution of 36 ,32, 45 , 55?
then please do clear this 1
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then please do clear this 1
1)In da question its time taken is given in minutes, so i converted dem 2 hours
which allowed me to use da eqn
O.A.R=overhead/machine hours
OAR is given as $36
overhead=OAR*machine hours
for da first product
36(OAR)*0.75(machine hrs)=27(fixed overhead)
Now do this 4 da rest of da products.
4 da 1st product da profit is 9
add back fixed overhead($27) 2 get contribution
which comes 2 $36
Does this solve ur doubt.
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wow ya
Thanks a lot :)
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2)50% of July's % August's is needed to b produced.
dat is 150+300=450
as 10% of production is faulty 450/0.9=500 is needed to b produced as as 450 will b available.
why do we need to divide by 0.9 by not *90%?
Q2) The table contains information for the two products of a company.
product X Y respectively :
contribution per unit $12 , $9
machine hours required per unit 6, 3
estimated sales demand 200 , 200
required machine hours 1200, 600
machine capacity limited to 1200 hours
What is the maximum possible contribution?
Ans : $3000
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can anyone answer my questions?
Thanks
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yeah..i did that...i used the equation..bt still i didnt get the answer...this is the weirdest quection ive even seen...
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skywalker112233 , i think you can help me explain my accounting doubts that i posted to test your skills
Thanks
as in i dint kinaa get you.. :S
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why do we need to divide by 0.9 by not *90%?
Q2) The table contains information for the two products of a company.
product X Y respectively :
contribution per unit $12 , $9
machine hours required per unit 6, 3
estimated sales demand 200 , 200
required machine hours 1200, 600
machine capacity limited to 1200 hours
What is the maximum possible contribution?
Ans : $3000
90%=90/100=0.9
Q2)machine capacity is da limiting factor
Find contribution per machine hour.
12/6=2 9/3=3
product2 is contributing da most so production of it shud b max dat is 600/3=200units
this tkes up 600 machine hrs,da rest 1200-600=600 is used in production of product1.
600/6=100,r da units of product1 2 b produced.
Max Contribution=200*9+100*12=$3000
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immortal,
i mean times 90% or 0.9 since 10% is faulty
why divided by 90%?
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immortal,
i mean times 90% or 0.9 since 10% is faulty
why divided by 90%?
U do da calculations..as 450 needed 2 b produced
X*90%=450(as 450 shud b da production after excluding da 10% faulty)
X=500
so 500*10%=50(faulty products)
500-50=450.
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how do you know this:
X*90%=450(as 450 shud b da production after excluding da 10% faulty)
but d question didnt say
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Ok i have a question from company accounts:
Company had ordinary shares 240000 of $0.50 each
8% preference shares of $1 each
Interim dividends paid: Preference shares 3000
Ordinary shares 4600
During the year company made a bonus issue of two Ordinary shares for evry five held. Following the bonus issue company also made a rights issue of one ordinary share for every five held at $0.80 each. Both issues of shares are entitled to dividends of the year ended.
Can somebody work this adjustment out and the treatment of it in the final account/s
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Ordinary shares of ($0.5) =240000+96000+67200=403200shares
share premium =67200*(0.8-.05)=$20160
Bank=67200*0.8=$53760
Dividends 2 ordinary shares =4600/240000*403200=$7728
dividends accrued=7728-4600=$3128
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How did you got the amount 67200?
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240000+96000=336000
4 every 5 shares 1 right issue =336000/5=67200 shares of value $33600
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Thanks man.
but what about the treatment?
anyways i will speak it out for you:
share premium will be addded under the capital and reserves section in the bs
Bank will also come in the bs under current assets
Dividends accrued in current liabilities
Dividends 2 ordinary shares in the appropriation A/c under profit after taxes & interest
correct?
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can any one give some worksheet for accouting
which will be help ful
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which topic of worksheet?
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immortal, you haven't answer my question yet.
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Thanks man.
but what about the treatment?
anyways i will speak it out for you:
share premium will be addded under the capital and reserves section in the bs
Bank will also come in the bs under current assets
Dividends accrued in current liabilities
Dividends 2 ordinary shares in the appropriation A/c under profit after taxes & interest
correct?
Its correct ,didnt ans because its common sense.. :P
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how do you know this:
X*90%=450(as 450 shud b da production after excluding da 10% faulty)
but d question didnt say
It shud b understood dat production 4 da month shud b 450.
so as 10% r faulty, da production should b such dat output is 450
Its mentioned in da question da 10% r faulty..
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good going people !!
every 1 working hard !! i need 2 start soon !! :-\
and wow immortal u great at acc !!!
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I am here for help! People post your doubts, exam is in 2 days and I got all my time for accounting inshAllah.
Thank You immortal for helping a lot. +rep.
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hi....em new here........hey can anyone send me a resource 4 Accounting IGCSE...because this freeexampapers....resource sucks...!!..........plz......hav got exams in a couple of hours..........!!
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IGCSE not a-level yea?
and okay I will check.
Can you tell me which topics you need please?
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oh mony good u here :D
hope ur other exams were excellent :)
m going 2 start with acc 2day hope will be done before exam !!
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guys i need help with Q2 A) of may/june 04 paper 2
http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_qp_2.pdf (http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_qp_2.pdf)
i went through the ms but still didnt understand where did the figures come from..i didnt get both the goodwill n capital acc !!
Thanks :D
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same paper may/june04 Q3 A) how do we get administration amount :$ 63000 (as given in the marking scheme ???
http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_ms.pdf (http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_ms.pdf) (page 10 )
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same paper may/june04 Q3 A) how do we get administration amount :$ 63000 (as given in the marking scheme ???
http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_ms.pdf (http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_ms.pdf) (page 10 )
The variable administration OH is $63000 while da admin overhead is $133000.
It's give da admin OH is $140000 4 5000units, of which 50% is variable.
der4 4 4500units da fixed remains constant,& da variable cost varies
140000*50%=70000(fixed)
70000*4500/5000=63000(variable)
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guys i need help with Q2 A) of may/june 04 paper 2
http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_qp_2.pdf (http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_qp_2.pdf)
i went through the ms but still didnt understand where did the figures come from..i didnt get both the goodwill n capital acc !!
Thanks :D
I can solve this, but u might get confused, as der r many ways 2 treat goodwill..
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ppl theres a chapter bout sole traders tht i noe nothing of nd how to prepare stock iventory statements...u hv ny idea??????
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ppl theres a chapter bout sole traders tht i noe nothing of nd how to prepare stock iventory statements...u hv ny idea??????
Post ur questions & vll try 2 solve dem :)
Check out http://basiccollegeaccounting.com/ this might help.
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I can solve this, but u might get confused, as der r many ways 2 treat goodwill..
plz do solve !! the way u are most comfortable with !!! :D
The variable administration OH is $63000 while da admin overhead is $133000.
It's give da admin OH is $140000 4 5000units, of which 50% is variable.
der4 4 4500units da fixed remains constant,& da variable cost varies
140000*50%=70000(fixed)
70000*4500/5000=63000(variable)
oh wow yeah Thanks a lot
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hey can someone tell me whether we should be having a balance b/d and c/d in a suspense account??
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suspence acc they dont come in paper 2, do they ??
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i dunno but now we have only paper 1 and 2 so im not sure what will come...so was just checking
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paper 1 is on 4 june right !! suspense acc i have not touched it yet :'(
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same paper may/june04 Q3 A) how do we get administration amount :$ 63000 (as given in the marking scheme ???
http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_ms.pdf (http://www.srepapmaxeeeerf.org/A%20Level/Accounting/CIE/2004%20Jun/9706_s04_ms.pdf) (page 10 )
First sum up da investment made by da partners..(dat is equipment,stock,debtors etc)
deduct da agreed transferred amounts dat is 45000 & 3000
this value is goodwill, which is recorded in Cr side of da a/c
As goodwill is not maintained,write off this goodwill by Dr da same value.
Da only difference is 2 writing off wit da P&L ratio.
Dr Bal b/d of 30000&45000, name it sundries not bal B/d
da difference on both sides is da bal c/d...
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our igcse paper 1 is tomorrow...thats y i wanted to know
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First sum up da investment made by da partners..(dat is equipment,stock,debtors etc)
deduct da agreed transferred amounts dat is 45000 & 3000
this value is goodwill, which is recorded in Cr side of da a/c
As goodwill is not maintained,write off this goodwill by Dr da same value.
Da only difference is 2 writing off wit da P&L ratio.
Dr Bal b/d of 30000&45000, name it sundries not bal B/d
da difference on both sides is da bal c/d...
i got it now !! Thanks :)
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may/june 05 Q3 b) what is all this i never got it ???
Q2 b ii) oct/nov 04 !!
plz help me with these !! Thanks in advance !!
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Love 2 help u, but got Aict as well, & i'm blank in this subject..
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ah ah k any ways so many doubts !!! why m i always with doubts !! :(
best of luck ppl acc paperz up !!! :D
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guyss hw was the paper...? hw did you'll do...? did ur balance sheet tally?
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not to discuss in this form before 24 hrs !!!
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now guyss hw was it..?? did any1 balance sheet tally?
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yea mine did the balance wz 9000!!
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oh sh*t... wt was ur net profit...?? andd wht did u do in the 2nd quection..?
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oh nine thousand i got some thing around 10*** n 17*** 7 thousand diff :(
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is this forum for A2 or AS only ??
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i need help
in May June 2011 qp43
Question 1
Trade and other receivables ?? :-\
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Hi there and welcome
I guess I can only sympathise and add ...weve been there and all own the t-shirts....
Keep up with the training and he will come out the other side.