Question 6 Mini Ltd took a factory premises on lease on 1.4.2016 for Rs.2 lacs per month. The lease is an operating lease. During March 2017, Mini Ltd relocates its operations to new factory building. The lease on old factory premises continues to be live up to 31.12.2019. The lease cannot be cancelled and cannot be sub-let to another user. The Auditor insists that balance lease rent of balance 33 months up to 31.12.2019 should be provided in the accounts for the year ending 31.3.2017. Mini Ltd seeks your advice.
CA Final IndigoLearn 8 Question 7 Exox Ltd is in the process of finalizing its accounts for the year ended 31.3.2016. The Company seeks your advice on the following: 1.The Company’s sales tax assessment for AY 2013-14 has been completed on 14.2.2016 with a demand of Rs.2.76 Crores. The Company paid the entire due under protest without prejudice to its right to appeal. The Company files its appeal before the appellate authority wherein, the grounds of appeal cover tax on additions made in the assessment order for a sum of Rs. 2.1 Cr. 2.The Company had entered into a wage agreement in May 2016 whereby, the labor union has accepted a revision in wage from June 2015. The agreement provided that the hike till May 2016 will not be paid to the employees but will be settled at the time of retirement. The Company agrees to deposit the arrears in government bonds by September 2017. Answer 2.The arrears for the period from June, 2015 to March, 2016 are required to be provided for in the accounts of the company for the year ended on 31st March, 2016 assuming that the negotiation for revision in wages initiated in the year 2015-2016.
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- Balance Sheet, Mini Ltd