Subjects
PRICING
COURSES
SIGN IN
Start Free Trial
Prasoon V.
Online Tutor since 2 Years
Tutor Satisfaction Guarantee
Accounting
TutorMe
Question:

X Limited sold goods worth $ 13 Mn to Y. Y asked for a trade discount amounting to $ 1 Mn and the same was agreed by X limited. The sale was effected and the goods were dispatched. On receipt of good, Y limited found that goods worth $ 2 Mn are defective. Y returned defective goods and made payments amounting to $ 10 Mn. The accountant booked sales worth $ 10 Mn. Discuss the contention of the Accountant with relevant Accounting Standard.

Prasoon V.
Answer:

As per IFRS 15- "Revenue Recognition", Revenue is the gross inflow of cash or other consideration arising in the course of ordinary activities from the sale of goods. However trade discounts and Volume rebates received in the course of carrying on business should be shown as deduction from Revenue as they represent a reduction in cost. In the given case, trade discount is to be deducted from $ 13 Mn and gross sale shall be recognized at $ 12 Mn ( $ 13 Mn - $1 Mn) and goods returned for $ 2 Mn are to be recorded in the form of Sales return. Alternatively, If a trade discount is not available in the ordinary course of business then X Limited should recognize the sale at $13 Mn only. Discount of $ 1 Mn and return of goods worth $ 2 Mn are to be adjusted by suitable provisions. In such a case, X Limited shall send a credit note of $ 3 Mn (Discount of 1 Mn +goods returned of 2 Mn) to Y account for these adjustments However in both the cases, the contention of Accountant to book sale of $ 10 Mn is not correct.

Finance
TutorMe
Question:

Calculate the value of share XYZ Limited from the following information- a)Equity share of capital-1200 b)Profit of the company-300 c)Par Value per share-40 d)Debt ration-25 e)Long run growth of the company-8% f)Beta-.1 g)risk free rate-8.7% h)Market Returns-10.3% i)Change in working capital per share-4 j)Depreciation per share-40 k)capital expenditure per share-48

Prasoon V.
Answer:

We know, EPS=Profit after tax/No of shares, No of shares=1200/40=30 units Thus EPS= 300/30=10 per share Now we know, Free cash flow to Equity(FCFE) is calculated as follows- Net Income-{(1-b)(capex-dep)+(1-b)(change in working capital)} or FCFE =10-{(1-.25)(48-40)+(1-.25)(4) =10-{6+3} =1 Now we know, Cost of equity= Risk free return +Beta(Market Return- Risk free return) Thus cost of equity =8.7+.1(10.3-8.7)=8.86% Market Price or Current value of each share= FCFE(1+g)/cost of equity-g where g is the long run growth of the company Thus putting the values in the above equation- 1(1+.08)/.0886-.08= 1.08/.0086=125.58 Thus value of each share of XYZ is 125.58.

Law
TutorMe
Question:

XYZ Limited declared and paid dividend in time to all its equity holders for the financial year xx15-xx16, except in the following case- Mrs ABC, holding 250 shares had mandated the company to directly deposit the dividend in her bank account. The company accordingly remitted the dividend but the bank returned the payment on the ground that there was difference in surname of the payee in the bank records. The company however did not inform about this discrepancy to Mrs ABC. Provide the course of action applying Suitable provisions of Companies act 2013

Prasoon V.
Answer:

Section 127 of Companies act 2013, provides a punishment for failure to distribute dividend on time. The above instance says that shareholder has instructed company regarding the payment of dividend and those directions cannot be complied with and the same has not been communicated to her. In the given situation, Company failed in complying with the directions received from Mrs ABC and has further failed in communicating to her regarding the failure. Hence the penal provisions as mandated by section 127 of Companies act 2013 will be applicable.

Send a message explaining your
needs and Prasoon will reply soon.
Contact Prasoon
Ready now? Request a lesson.
Start Session
FAQs
What is a lesson?
A lesson is virtual lesson space on our platform where you and a tutor can communicate. You'll have the option to communicate using video/audio as well as text chat. You can also upload documents, edit papers in real time and use our cutting-edge virtual whiteboard.
How do I begin a lesson?
If the tutor is currently online, you can click the "Start Session" button above. If they are offline, you can always send them a message to schedule a lesson.
Who are TutorMe tutors?
Many of our tutors are current college students or recent graduates of top-tier universities like MIT, Harvard and USC. TutorMe has thousands of top-quality tutors available to work with you.