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AS 29
Accountancy
Audit & SM LTD Provides Sales Warranty For 3 years to its customer based on past experience the company has the following policies for making provision for Warranties on the invoice amount on The Remaining balance warranty period . Less than 1.5 years : 3.5 % Provision. More than 1.5 years : 4 % provision. The company has raised an invoice as Under Invoice Date Amount(₹) 26/7/2020 10,00,000 21/3/2020 4,50,000 14/8/2022 9,00,00 18/12/2022 6,50,000 You are required to calculate the provision made for warranty under AS 29 as At 31/3/22 and 31/3/23.
Answers (3)
Please correct me if im wrong As on 31/3/22 = 14,50,000 × 4% = 58,000 As on 31/3/23 = 10,00,000 × 4% + 15,50,000 × 3.5% =94,250 For year ending 31/3/2023, the transaction on 21/3/2020 is not considered for calculating provision for warranty as 3 years have expired, so warranty is no longer provided on it
