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Hey John,
Following is the question, I have small problem here . In Solution they caluclated closing raw material 96000/12, I don’t know how they got this figure. Could you please make material purchase budget for me. Especially how to calculate closing raw material. Thanks.J Co makes a component M which uses 3kg of raw material X. The opening inventory at the start of next year is expected to be as follows.
Opening inventory of raw material X 5,000kg @ $4
Opening inventory of component M 3,000 units
Budgeted sales of component M are expected to be 48,000 units (occurring evenly throughout the year).
Closing inventory at the end of the year is as follows.
Closing inventory of raw material X One month’s worth of production
Closing inventory of component M Two month’s worth of sales
(a) How many units of component M are to be produced in the year?
(d) What is the material X purchases budget for the year?Thanks john if you don’t mind I need a bit more explaination on 1st question.
1 Since we already have allowance which means we already debited SOPL.
Why we’ll charge them again. I mean we had allowance for $100 which we debited expense A/c. If we debit expense A /c with 500 that will sum up $600. Thanks
Hey john,
In the following question, could you tell me why wouldn’t we deduct bad debts from receivable to get allowance for receivable. In solution they get 3% allowance of 420000.At 1 January 20X4, Tartar Co had total receivables of $380,000. A specific allowance of $20,000 had been made for a business customer, Drab. The general allowance for receivables was 2.5%. During the year, Drab went out of business owing Tartar Co $28,000, none of which is expected to be recovered. At 31 December 20X4, Tatar had total receivables of $420,000. There were no specific allowances but the general allowance for receivables was increased to 3%.
What is the charge in the statement of profit or loss for the year to 31 December for the allowance for receivables and irrecoverable debts?Hey john,
Following is the question, could you tell me what is the treatment of bad debts if already In allowance. Should we charge them again in SOP&L. ThanksAt the beginning of the year, the allowance for receivables was $850. At the year-end, the allowance required was $1,000. During the year $500 of debts were written off, which includes $100 previously included in the allowance for receivables.
-s
What is the charge to statement of profit or loss for receivables expense for the year?Hey john,
Could you please explain me, why they didn’t credited by product in process account in above question. Secondly why we wouldn’t subtract by product cost from total cost incurred during process. ThanksThanks john and could you give me any advice for this subject because I am confident in applying the errors on scenario. Although I have enough knowledge of correction of errors and suspense account.
Hey john,
Could you please explain me the all entries especially last 2. Thanksone of the following journal entries is correct according to its narrative?
t.com
Debit Credit $ $
A Mr Smith personal account 100,000
spo
Directors’ remuneration 100,000
Bonus allocated to account of managing director (Mr Smith)
B Purchases 14,000 Wages 24,000 Repairs to buildings 38,000
log
l.b
Transferring cost of repairs to buildings carried out by company’s own employees, using materials from inventory.
ia
r
C Discounts allowed 2,800
Discounts received 2,800
te
Correction of error: discounts allowed total incorrectly debited to discounts received account
a
D Suspense account 20,000
Rent receivable 10,000 Rent payable 10,000
-m
y
Correction of error: rent received credited in error to rent payable
account. (2 maHey Afrina,
As I could understand the question, required receiveable allowance is higher by 1 % out of 3 %. In other words let assume current receivables allowance is 100% and required allowance is 133.33%. So current allowance would be $3000 and required allowance would be 4000. This is my way to solve. Anyway John would give you proper answer.Hey john,
I’m confused in this question about what is accounting treatment for this question. I used accounting equation to solve it. Profit= closing assets +drawings-capital introduced – opening AssetsA business’s bank balance increased by $750,000 during its last financial year. During the same period it issued shares of $1 million and repaid a loan note of $750,000. It purchased non-current assets for $200,000 and charged depreciation of $100,000. Working capital (other than the bank balance) increased by $575,000.
What was its profit for the year?
A $1,175,000 B $1,275,000 C $1,325,000 DHey john,
A company manufactures three joint products and one by-product from a single process. Data for May are as follows.
s
Opening and closing inventories Nil Raw materials input $180,000 Conversion costs $50,000
ca
c
Output Sales price
a
Units $ per unit Joint product L 3,000 32 M 2,000 42 N 4,000 38 By-product R 1,000 2
free
By-product sales revenue is credited to the “sales account”. Joint costs are apportioned on a sales value basis. ThanksAbove is the question. Could you tell me what is the double entry for by product in process account and sales account.
Thanks john I should practice more of these type of questions. I could not understand question as u did .
Hey john ,
Could you explain me this question.A limited liability company, receives rent for subletting part of its office premises to a number of tenants.
In the year ended 31 December 20X4 B received cash of $318,600 from its tenants. Details of rent in advance and in arrears at the beginning and end of 20X4 are as follows:
31 December 20X4 20X3
$ $ Rent received in advance 28,400 24,600
Rent owing by tenants 18,300 16,900
All rent owing was subsequently received
What figure for rental income should be included in the statement of profit or loss of B for 20X4?Hey john,
Following is the question. I have some confusion in it. Would you help me logic.A sole trader’s business made a profit of $32,500 during the year ended 31 March 20X8. This figure was after deducting $100 per week wages for himself. In addition, he put his home telephone bill through the business books, amounting to $400 plus sales tax at 17.5%. He is registered for sales tax and therefore has charged only the net amount to his statement of profit or loss and other comprehensive income.
His capital at 1 April 20X7 was $6,500. What was his capital at 31 March 20X8?Now question is Closing capital = opening capital + increase in capital
why sales tax would be deducted from capital since output tax is receiveable. Double entry would be Dr telephone expense 400 Dr sales tax 70 Cr cash Account 470.
Hey John,
Sorry i need some explanation on this. Sales ledger is list of debtor. SLCA is total receiveable. In the first place, why we are carrying Dr and Cr balances in Sales ledger and SLCA instead B/f Dr Balance. Secondly why we add sales ledger cr balance in SLCA. Because we carried Sales day book down in SLCA. THANKSHey John,
Could you tell me in above answer why did you add the personal account’s cr balance in SLCA . ThanksHEY John,
How are you. I’ve similar problem with suspension a/c. Could you please brief me on following situations thanks1 A’s total cash receipts book balance undercasted by $100.
2 A’s Receiveable column in cash receipts book undercasted by$100.
Q1: Will situation 1 or 2 make difference in trial balance.
Q2: Will Receiveable Control account be effected and imbalance the Trial balance.
Q3: which are the possible error in Book of Prime Entry which effects Nominal ledger.
Note: if I’m not wrong “6” types of errors are in “Nominal Ledger” which don’t effect Trial balance and 4 types of errors which effects. But I’m confused about Book of Prime Entry. Thanks
