Accounts - Advice to Bplt Ltd About the Treatment of the Following in the Final Statement of Accounts for the Year Ended on 31st March 2002

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ACCOUNTS

CASE STUDIES

Q1) Advice to BPLT Ltd about the treatment of the following in the final statement of accounts for the year ended on 31st March 2002. A claim lodged with the railways in March 1999 for loss of goods of Rs 2,00,000 had been passed for payment in March 2002 for Rs 1,50,000. No entry was passed in the books of company, when the claim was lodged.

Q2) Y. Co Ltd used certain resources of X Co Ltd. In return X Co. Ltd receives Rs 10 lakhs and Rs 15 lakhs as interest and royalties, respectively from Y Co Ltd during the year 2001-2002 you are required to state whether and on what basis their revenue can be recognized by X Co Ltd?

Q3) On December 1, 2001 Royal Co. purchased Rs 4,00,000 worth of land for a factory site. Royal razed an old building on the property and sold the material its salvaged from the demolition. Royal incurred additional costs and realised salvage proceeds during December 2001 as follows :

|Demolition of old building |Rs. 50,000 |
|Legal fees for purchase contract and |Rs. 10,000 |
|recording ownership | |
|Title guarantee insurance |Rs. 12,000 |
|Proceeds from Sale of Salvaged Materials |Rs. 8,000 |

In its December 31, 2001 Balance Sheet Royal Co. should report a balance in the land account.

Q4) The information of cash flow generated by two companies X Ltd and Y Ltd. Belonging to same industry is as follows?

F. Y. 2004-2005 Cash Flow Statement

| |…...

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