9 Question 7: M/s. Mahesh Ltd is developing a new production process. During FY13 total expenditure incurred on the process was Rs.60 lacs. The Production process met the criteria for asset recognition as an intangible asset on 1.12.12. Expenditure incurred till this date was Rs.32 lacs. Further expenditure incurred on the process for FY14 was Rs.90 lacs. As on 31.3.14 the recoverable amount of knowhow embodied in the process is estimated to be Rs.82 lacs. This includes estimates of future cash flows and inflows. You are required to compute the expenditure to be charged to P&L for the year ended 31.3.13 and the carrying amount of the intangible asset on that day, expenditure to be charged to the P&L at the end of 31.3.14 and carrying value of intangible asset on that day. 36
CA INTERMEDIATE IPC INDIGOLEARN 10 Question 8 A Company with a turnover of Rs.250 Cr and annual advertising budget of Rs.2 Cr had taken up marketing of a new product. It was estimated that the Company would have turnover of Rs.25 Cr from the new product. The Company had debited to its P&L Account the total expenditure of Rs.2 Cr it had incurred on extensive initial advertisement campaign for the new product. Is the procedure adopted by the Company Correct?
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