eMERgency:What does these questions having double meanings in Accountancy (CPT) mean?

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s.lohani (Querist)

31 October 2007 Case A:
If repair cost of building is 15ooo, whitewash epenses are 10000 cost of extension of building is 5 lakh, and cost of improvement in electrical wiring system is 25000; the “amt. to be expense” is _______
a) 50k b)550,000 c) 25000 d) nil

Case B:
X of Kolkata sends out goods worth 1 Lakh to Y of madras at cost +25%. Consignor’s expenses are rs 2000. 3/5 of the goods were sold by consignee at Rs 85000. Commission 2% on sale + 20% of “gross sales less all commission exceeds invoice value”? Amt commisoned is__
a)3083 b) 3000 c)2500 d)2000

Case C:
Micro Ltd issued 15000, 15% debentures of Rs 100 each at a premium of 10%, which are redeemable after 10 years at premium of 20%. The amount of loss on redemption of debentures to “written off” every year is ….
a) 15000 b) 30000 c) 45000 d)22500

The ambiguity lies in the words between “ ”

Plzz help me to find the answers with procedure

KAAPIL

KAAPIL (Expert)

31 October 2007 Case A

Capital Expenditure = 5 LAKH
Revenue Expenditure = 15000 + 10000 = 25000

Case C

Total premium = 1500000*20% = 300000

Write off in 10 years i.e. is Rs. 30000 every year

Sandeep Diwan

Sandeep Diwan (Expert)

31 October 2007 Case A- When they are asking for amt to be expense means they are asking for Revenue expense hence answer must be 25000
Case B - Let the total commision = X
Invioce value =100000+25%OF 100000
= 125000
I V of goods sold = 125000*3/5
= 75000
Amount of commission-
X =2%of 85000+20%(85000-X-75000)
=1700+2000-0.20X
1.20X= 3700
X = 3700/1.20 = 3083
Case 3 Premium on redemption= 1500000*20%
=300000
Premium at issue = 1500000*10%
= 150000
Amount to be wriitten off
= (300000-150000)/10 = 15000

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