#17: Question for the day (Adv. Acc - Inter)

answered on 22-Aug-22 21:25

Write the answer in a sheet as you would write in exam and send photo by 8pm. #LetsPractice Monu Ltd. sold machinery having WDV of Rs. 400 lakhs to Sonu Ltd. for Rs. 500 lakhs and the same machinery was leased back by Sonu Ltd. to Monu Ltd. The lease back was in nature of operating lease. Explain the accounting treatment as per AS 19 in the following cases: (i) Sale price of Rs. 500 lakhs is equal to fair value. (ii) Fair value is Rs. 450 lakhs and sale price is Rs. 380 lakhs. (iii) Fair value is Rs. 400 lakhs and sale price is Rs. 500 lakhs. (iv) Fair value is Rs. 460 lakhs and sale price is Rs. 500 lakhs.

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Correct answer below. Please refer and evaluate. Following will be the treatment in the given cases: (i) When sales price of Rs. 500 lakhs is equal to fair value, Monu Ltd. should immediately recognise the profit of Rs. 100 lakhs (i.e. 500 â?? 400) in its books. (ii) When fair value of leased machinery is Rs. 450 lakhs & sales price is Rs. 380 lakhs, then loss of Rs. 20 lakhs (400 â?? 380) to be immediately recognised by Monu Ltd. in its books provided loss is not compensated by future lease payment. (iii) When fair value is Rs. 400 lakhs & sales price is Rs. 500 lakhs then, profit of Rs. 100 lakhs is to be deferred and amortised over the lease period. (iv) When fair value is Rs. 460 lakhs & sales price is Rs. 500 lakhs, profit of Rs. 60 lakhs (460-400) to be immediately recognised in its books and balance profit of Rs. 40 lakhs (500-460) is to be amortised/deferred over lease period.

Sahibdeep Singh

CA Inter

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2

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Entry

answered on 22-Aug-22 10:24

What is contra entry can anyone explain to me with example and in easy language plzz.

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Yes

Prathmesh kharul

CA Foundation

★ 3K+

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303

Calculation of excess capital

answered on 23-Aug-22 01:07

Retirement of partnership-Illustration 4 , I can't understand how to calculate capital proportionate

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Tq sis

Lathika

CA Inter

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Recording

answered on 23-Aug-22 20:27

How to record a journal entry for reserve created out of profit for purpose of purchasing a machinery.??

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See when the reserve is created out of profits then the profit gets reduced by the amount of such transfer. Actually profit has credit Balance so when it get reduces so it needs to be debited And reserves has credit balance So when u transfer profit from P&l to reserve then balance of reserves gets increased so reserves should be credited

Prathmesh kharul

CA Foundation

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4

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Journal Entry

answered on 21-Aug-22 16:47

If i take any asset suppose a car on rent basis for one month will there be any journal Entry passed??

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In this case we are not purchasing any asset (i e) car ... We are taking only on rent basis You can do the journal entry only for rent of the car ..... That enrty has been mentioned above by our seniors in above answer. Thank you :)

Prathmesh kharul

CA Foundation

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Please explain this case study

answered on 20-Aug-22 21:58

Accounting standard to valuation of inventories

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MPR Sanjay Kumar

CA Inter

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321

Explain this MCQ

answered on 25-Aug-22 12:33

Please explain this this MCQ attached in this Dout

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Ok Sir Thanks

Pancha G

CA Inter

★ 350

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202

Workman compensation

answered on 23-Aug-22 20:50

It is capital or revenue expenditure.??? Or it depends ??

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Expenses which are incurred oftenly or regularly are categorised under revenue expenditure In this case as workman compensation it is paid by employer regularly so it's revenue expenditure

Rick Y

CA Final

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Cash flow

answered on 22-Aug-22 09:36

I want explanation in this marked ans And 3 4 adjustment It is from 3rd question nov 2019

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Refer to question no.3 in pg. no.4.118 in study material , you can find similar kind of adjustments in that question .

A M K

CA Inter

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Entry

answered on 20-Aug-22 14:56

A fixed deposited of face value rs. 16500 matured . Its maturity value rs. 21000 was received in cash . This cash realized was used for buying a gift for the owners wife....??

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drawing ac dr 21000 to cash ac 21000 (being cash withdraw)

Shruti ghosalkar

CA Foundation

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