PLS SOLVE THE QUESTION CORRECTLY WITH FULL CALCULATION

on (a) A Ltd. provides after sales warranty for two years to its customers. Based past experience, the company has the following policy for making provision for warranties on the invoice amount, on the remaining balance warranty period. Less than 1 year: 2% provision More than 1 year: 3% provision The company has raised invoices as under: Invoice Date Amount 11th Feb, 2017 60,000 25th Dec, 2017 40,000 04 Oct, 2018 1,35,000 Calculate the provision to be made for warranty under AS-29 as at 31st March, 2018 and 31st March, 2019. Also compute amount to be debited to P&L account for the year ended 31st March, 2019. (6) As per provisions of AS-26, how would you deal to the following situations: (1) 723,00,000 paid by a manufacturing company to the legal advisor for defending the patent of a product is treated as a capital expenditure. (2) During the year 2018-19, a company spent 77,00,000 for publicity and research expenses on one of its new consumer product which was marketed in the same accounting year but proved to be a failure. (3) A company spent *25,00,000 in the past three years to develop a product, these expenses were charged to profit and loss account since they did not meet AS-26 criteria for capitalization. In the current year approval of the concerned authority has been received. The company wishes to capitalize 25,00,000 by disclosing it as a prior period item (4) A company with a turnover of 200 crores and an annual advertising budget of 750,00,000 had taken up for the marketing of a new product by a company. It was estimated that the company would have a turnover of 20 crore from the new product. The company had debited to its Profit & Loss Account the total expenditure of 50,00,000 incurred on extensive special initial advertisement campaign for the new product (c) Indicate in each case whether revenue can be recognized and when it will be recognized as per AS-9. (1) Trade discount and volume rebate received. (2) Where goods are sold to distributors or others for resale. (3) Where seller concurrently agrees to repurchase the same goods at a later date. (4) Insurance agency commission for rendering services. (5) On 11-03-2019 cloths worth 50,000 were sold to X mart, but due to refurbishing of their showroom being underway, on their request, clothes were delivered on 12-04-2019. (d) Following information is supplied by K Ltd.: Number of shares outstanding prior to right issue - 2,50,000 shares. Right issue - two new share for each 5 outstanding shares (i.e. 1,00,000 new shares) Right issue price - 198 Last date of exercising rights - 30-06-2018. Fair value of one equity share immediately prior to exercise of right on 30-06-2018 is 2 102 Net Profit to equity shareholders: 2017-2018 - 250,00,000 2018-2019 - 75,00,000 You are required to calculate the basic earnings per share as per AS-20 Earnings per Share. (4 Parts x 5 Marks - 20 Marks)