Financial Reporting - November 2018

() luxe bike manufactured by Zed Limited is sold with an extended 5 warranty of 2 years for € 87,300 while an identical Deluxe bike without the extended warranty is sold in the market for % 80,000 and equivalent warranty is given in the market for ₹ 10,000. How should Zed Limited recognize and measure revenue in the books on the sale of the bikes and warranty ? (a) On 1* April, 2017 Good Time Limited purchased some land for?…

4. (a)“A machine was acquired by ABC Ltd. 15 years ago at a cost of % 20 5 crores. Its accumulated depreciation as at 31 March, 2018 was % 16.60 crores. Depreciation estimated for the financial year 2018-19 is 7 1 crore. Estimated Net Selling Price of the machine as on 31" March, 2018 was % 1.20 crores, which is expected to decline by 20 per cent by the end of the next financial year. _ Its value in use…

(d)Navya Limited manufacturer of ceramic tiles has shown a net profit of % 15,00,000 for the first quarter of 2018-19. Following adjustments were made while computing the net profit : (i) Bad debts of % 1,64,000 incurred during the quarter, 75% of the bad debts have been deferred for the next three quarters (25% for each quarter), Gi) Sales promotion expenses of % 5,00,000 incurred in the first quarter and 90% expenses deferred to the next three quarters (30% for…

Era Development Limited has been preparing Value Added 8 Statement for the past six years. The department of HRD (Human Resource Development) of the Company has suggested introducing a value added incentive scheme to motivate the employees for better performance. Under the scheme it is proposed that the best index performance favourable to employee ie. Employee Costs to Added value, for the last six years, will be used as the target index for future calculations of the bonus to be…