#23: Question for the day (Inter - Group I)

answered on 30-Aug-22 09:47

Write the answer in a sheet as you would write in exam and send photo by 8pm. #LetsPractice HIL Ltd. was making provision for non-moving stocks based on no issues having occurred for the last 12 months upto 31.03.2021. The company now wants to change it and make provision based on technical evaluation during the year ending 31.03.2022. Total value of stock on 31.3.22 is Rs. 120 lakhs. Provision required based on technical evaluation amounts Rs. 3.00 lakhs. However, provision required based on 12 months (no issues) is Rs. 4.00 lakhs. You are required to discuss the following points in the light of Accounting Standard (AS)-1: (i) Does this amount to change in accounting policy? (ii) Can the company change the method of accounting? (iii) Explain how it will be disclosed in the annual accounts of HIL Ltd. for the year 2021-22.

latest answer

Correct answer: (i) The decision of making provision for non-moving inventories on the basis of technical evaluation does not amount to change in accounting policy. Accounting policy of a company may require that provision for non-moving inventories should be made but the basis for making provision will not constitute accounting policy. (ii) The method of estimating the amount of provision may be changed in case a more prudent estimate can be made. In the given case, considering the total value of inventory, the change in the amount of required provision of non-moving inventory from Rs. 4 lakhs to Rs. 3 lakhs is also not material. (iii) The disclosure can be made for such change in the following lines by way of notes to the accounts in the annual accounts of HIL Ltd. for the year 2021-22 in the following manner: 'The company has provided for non-moving inventories on the basis of technical evaluation unlike preceding years. Had the same method been followed as in the previous year, the profit for the year and the value of net assets at the end of the year would have been lower by Rs. 1 lakh.'

Sahibdeep Singh

CA Inter

★ 14K+

3

2K+

Internal reconstruction

answered on 30-Aug-22 23:41

Kindly explain the journal entry of cancellation of own debentures

latest answer

Thank you , I understood

Vysali Pasumarthy

CA Inter

★ 1K+

3

402

Trading account

answered on 30-Aug-22 05:44

Trading A/C is used to find out ________ profit A.Product B. Business c)Both A and B d)None of the above

latest answer

Product

Jaya Jaya

CA Inter

★ 165

8

279

Final account problem

answered on 29-Aug-22 00:26

Rent for godown=55000 But ans shows 11000 outstanding for two months. I can't understand this 3rd adjustment.

latest answer

55000 is for 10 months.Then for two months,)55000/10 )*2

Nakul Dixit

CA Final

★ 4K+

5

4K+

Purchase account

answered on 28-Aug-22 14:04

Purchase a/c is carried to trading a/c what is the reason behind this

latest answer

Tq

Jaya Jaya

CA Inter

★ 165

3

293

Plse all are check me

answered on 28-Aug-22 15:22

As per Accounting standard 2 valuation of inventories... Raw materials valued at cost ( if finished goods are sold at above cost of this) otherwise replacement cost.. Here otherwise means replacement cost which means the finished good are sold at below cost means should have to go replacement cost IAM I correct??

latest answer

My honourable Suraj sir ,I revised your video,I just posted for Assurance... thanks ð???

MPR Sanjay Kumar

CA Inter

★ 490

3

279

Liquidation of companies

answered on 28-Aug-22 06:44

Please explain how loss due to liquidation is â?¹59,00,000...

latest answer

Paid up share capital - surplus available for shareholders( given in question) 79 lakhs - 20 lakhs = 59 lakhs (loss on liquidation) Loss is apportioned on the basis of no.of shares held

Naveen Kumar S

CA Inter

★ 1K+

1

251

Provision for doubtful debts

answered on 27-Aug-22 18:37

Ca foundation Principles and practice of accounting module 2 Page 7.53 last adjustment.

latest answer

To do this, increase your bad debts expense by debiting your Bad Debts Expense account. Then, decrease your ADA account by crediting your Allowance for Doubtful Accounts account.

Shiva Netha

CA Foundation

★ 12K+

2

718

Bank reconciliation statement

answered on 27-Aug-22 18:38

Q5

latest answer

Ok great

Harshita Tripathi

CA Inter

★ 2K+

4

318

Sale or return basis

answered on 27-Aug-22 11:20

How we can calculate cost of the goods in detail

latest answer

Note 33(1/3)% =1/3rd Eg.100 * 33.33% = 100 * 1/3 Both results to And=33.33333 If 1/3rd sales = then 1/2nd cost Sale Rs.1,50,000. (given in Qn) Less :profit Rs 50,000 (1/3 of 150000 ) Cost of goods Rs.1,00,000 Also note = 1/2 of 1 lac cost is Rs 50,000 same profit

Harish Raj

CA Inter

★ 4K+

1

298