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I understood your explanation for the $30m 8% bond BUT for the 6% $20m convertible bond
The question says that, ” $20 million loan in the form of a 6% convertible bond on which interest is payable annually”.The wording of the question for the 6% convertible bond says that the interest is PAYABLE (not paid) annually (same casual wording used normally for loans in questions where we work out the closing balance) , so how we come to know that interest which was payable was actually paid at the year end as this is not explicitly stated that interest is PAID annually instead the question says that interest is payable annually.
Is this an assumption you are taking or its just a normal way of asking the the question and if i am wrong in understanding the requirement . Please clarify or tell me where i am getting it wrong?
As per my understanding of the concept ,
As the asset was purchased on the first day of the start of the year(i.e 1 July 2008) so there will be a full year’s capital allowance in year 1 and the savings of this year 1 capital allowance would come in year 2 as the question states its in arrears.
If the asset would have been purchased on 30 June 2008 i.e , on the last day of the previous year then the first capital allowance would have come in year 0 and the savings on it would have been claimed in year2. Please tell me if I am right ?
The name of the question is NEPTUNE Co and part (a) of the requirement which requires us to calculate the APV. Kindly look at the question then please let me know.
Thank you Sir, but I am not being able to understand why the party In a loss position delivers shares to the party in gain position. Kindly explain the reason behind this treatment. I am not able to understand the purpose and the reason of this particular treatment.
Sir so can i take the meaning that incremental budgeting adjusts for an expected increase only from the exam point of view and anykind of decrease is not adjusted for in an incremental budget?
Ok sir John thank u very much ,it means that I should focus on mix and yield variances and planning and operational variances for PM
So can i understand it as that whenever you will buy a new machinery for construction contracts the total cost of buying the machinery will be included in calculating the total profit or loss on the contract and the depreciation will only be charged to ”cost incurred to date ” in SOFP in calculating the inventory figure i.e, ”(cost incurred to date+depreciation) – COS recognized to date=inventory. Is that right?
I am still confused on your explanation about the first scenario. Its still not cleared in my mind.So kindly explain the reason behind your explanation about first scenario in more cleared way so that i can understand it more comprehensively.As far as your explanation about second scenario is concerned , what i was able to understand from your response is that, if the plant and machinery has not been bought new for the construction project but has been used on it then the ”costs incurred to date” and ”estimated costs of completion” will include only depreciation in it i.e, we then need to add depreciation of plant in ”costs incurred to date” and ”estimated costs of completion” by ourselves (kindly correct me if I am wrong about my understanding of the second scenario)…..
Sir, I have BPP practice and revision kit of September 2016 to August 2017 of that very version that I have of BPP text. Would it be good for me if I do practice from that kit? or It is a must that I should look out for a new version of the kit to increase my chances of passing my LW exam? what would you suggest
