Accounts P3 doubts here

[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]

may june 09  (paper 3)
question 4 please

np , & u r welcome

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 >

[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]

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..

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?   

[Dasith]

^ 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?   

XD , those were the times when i had exams .... those questions were da only things that made me revise ,
Ohh great ! i could take a break

[cs]

June 2002 question 24

[Dasith]

June 2002 question 24

which paper ? , & is it edexcel or cambridge ?

[cs]

Cambridge

June 2007 Q13
November 2004 Q14 as well tyvm

[Dasith]

2002 Question 24(may)

IT's like this They expect 12000 units to be sold with a decrease in finished goods of 1000 units , which would mean:
They would produce 11000 units & take the remaining 1000 from stocks.
To produce 11000 units they would require raw-materials = 11000 x 3 = 33000 kg
Then their Raw-material-stocks are expected to rise by                    =   2000 kg
For a production of 11000 units + 2000kg rise in rawmaterial stocks
They require purchases of                                                          =35000 kg


2007 Question 13(may)

Gearing is basically "burrowing/net-assets", the definition of gearing & formulas may vary slightly though , but if u take it as "burrowing/net assets"
IF assets decrease(depreciation) , net assets decrease so gearing rises..

2004 question 14(nov)

Return on capital employed = Return(profit) / (Equity + long term debts or debts > 1 year )

convertible loan stock is a just a loan which allows the lender to convert them to shares @ a given date/ dates

IF loan stock is issued , Gearing ratio increases As borrowings increases.
& Return on capital employed decreases As long term debt increases.

[cs]

2002 Question 24(may)

IT's like this They expect 12000 units to be sold with a decrease in finished goods of 1000 units , which would mean:
They would produce 11000 units & take the remaining 1000 from stocks.
To produce 11000 units they would require raw-materials = 11000 x 3 = 33000 kg
Then their Raw-material-stocks are expected to rise by                    =   2000 kg
For a production of 11000 units + 2000kg rise in rawmaterial stocks
They require purchases of                                                          =35000 kg


2007 Question 13(may)

Gearing is basically "burrowing/net-assets", the definition of gearing & formulas may vary slightly though , but if u take it as "burrowing/net assets"
IF assets decrease(depreciation) , net assets decrease so gearing rises..

2004 question 14(nov)

Return on capital employed = Return(profit) / (Equity + long term debts or debts > 1 year )

convertible loan stock is a just a loan which allows the lender to convert them to shares @ a given date/ dates

IF loan stock is issued , Gearing ratio increases As borrowings increases.
& Return on capital employed decreases As long term debt increases.

thank you, may i know the formula of return on capital employed? does it involve long term debt?