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Unit  2: May 2007 Question #2(a)

2/25/2018

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 Now that both the Absorption and Marginal Costing Income Statements have been completed the reconciliation between the Net Incomes calculated under each method can be done.
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Unit 2: June 2005, Question #2(b)

2/21/2018

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Telcom's Manufacturing Inc.
2b (i)   Calculation of total cost of L23 and L24 using the traditional costing system:
  • Calculate the predetermined over rate (POHR) = Total Overhead Cost/Direct labor hours: $400,000/10,000 hours = $40/hr.                                        
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Under the traditional costing system:
  • L23 total costs equals $174,000
  • L24 total costs equals $362,600.

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Unit  1: May 2013, Question#2

2/6/2018

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 ​Note 2:
Depreciation on Equipment: 10% x $170,240 = $17,024 per year. This is the depreciation charge for the Statement of Comprehensive Income.
Accumulated depreciation charged on Equipment as at December 31st 2012 - [$32,200 + $17,024] = $49,224. This figure will be recorded on the Statement of Financial Position.
Note 3:
Insurance to be recorded on the Statement of Comprehensive Income = $1,320. Prepaid insurance to be recorded on the Statement of Financial Position = [$2,590 - $1,320] = $1,270.
​Note 4:
The amount of $50,000 is now a ‘bad debt to be written off’ therefore:
Double entry: Debit        Bad Debt Expense Account         $50,000
                         Credit          Accounts Receivables  Account  $50,000
Note 5:
The new provision for doubtful debt balance = 2% x [$300,050 - $50,000] = $5,001. Therefore the current provision needs to be increased by $519, [that is $5,001-$ $4,482]. This increase of $519 will be recorded as an expense on the Statement of Comprehensive Income. The new provision balance of $5,001 will be netted off against the accounts receivable figure in the Statement of Financial Position.

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Unit  1: May 2009, Question#3

2/5/2018

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​1. Calculation of income tax paid during 2007-2008.
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 Alternatively a ledger account can be prepared to calculate the amount of income tax that was paid during the year:
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Unit  1: May 2002 Question#2

2/1/2018

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Note 2:
The bank loan will be recorded as follows:
$6,250 will be recorded under the Current Liabilities section of the Statement of Financial Position as this portion is due to be paid in less than 1 year.
The balance $25,000, ($31,250-$6,250) will be recorded under the Non Current Liabilities section of the Statement of Financial Position as this portion is not due to be paid in less than 1 year.
Note 3:
Dividends due on investments – 30¢ x $25,000 = $7,500. This would be added to the dividends from investments balance of $3,500 as this is dividends receivable. Therefore the total for the Statement of Comprehensive Income would be $11,000 i.e. ($3,500+$7,500) and the dividends receivable of $7,500 will appear in the Statement of Financial Position under Current Assets. 
Note 5:
The amount of $80,000 is now a "bad debt to be written off" therefore:
Double entry: Debit        Bad Debt Expense Account         $80,000
                          Credit          Accounts Receivables  Account  $80,000

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    Author

    The author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor.

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    Unit 1: Adjusting Journals
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    Unit 1: Contingencies
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    Unit 1: Ratio Analysis
    Unit 1: SOFP And SOCI
    Unit 1: Statement Of Cashflows
    Unit 2: Classification Of Costs
    Unit 2: Job Costing
    Unit 2 Manufacturing Accounts
    Unit 2: Marginal Vs Absorption Costing
    Unit 2: Remunerations
    Unit 2: Traditional Vs Activity Based Costing

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