Accounting Standard Case Analysis Weight 10%

The case study is for Section B

What is required:
1. Analyse the case and submit the hard coy of the analysis
!. Be ready to resent. Any body from any grou may be as"ed to resent
#. State $%rite about& the deliberations that %ent into the 'nal
conclusions ie the (arious alternati(es considered and %hy you choose the
ans%er
). *ou can gi(e an e+amle etc to sho% ho% you arri(e at the abo(e
conclusion
,. -se .ndian Accounting Standards $not the 'rst choice& /.01S $if not
adequate you can use -S 2AA3&
1. Search and Find.com is the new web service provider that helps people search for
anything they need in the Realty Space Here the property owners can register for sale of
the property and buyers can also search /post their requirements. SF does not charge the
buyer any fees. !he real estate developers can advertise in SF website and a clic" on the
advt will ta"e them to the developers website #ach advt cost is based on the si$e and the
time for discplay. !ypically% a normal pac"age is for & months on '(' slot for Rs. ' lacs.
)ompanies have to pay the entire amount in advance. SF also charges Rs. *+++ per
advertisement clic"ed
,. - ./ !ime Share club sells holiday home stays. !hey o0er a life membership 1life time of the
member2 through a one time payment of Rs. *+%alcs. !he members are eligible to stay for one
wee" per year in any of their 3properties4. Further every new member is given a 5)6 !7 costing
Rs. '+%+++ free. How will the company account for the transactions.
'. -8) 5!6 started its manufacturing activity in -pril ,+*9. !he construction activities
commenced on *+/9/*9. For the same the company was allotted land comprising *++ acres
in Raigad :ew !own by government at a highly subsidi$ed rates. !he company paid Rs. ,;
crores for the same. !he governments had also a condition that an approach road had to be
constructed 1on another land 2 belonging to the government leading to the land of -8) .
!he company spent Rs. ,; lacs on the road construction. !he allotted land had some old
structures and buildings etc. !he company spent Rs. *;+ lacs on demolishing these structures
for constructing the new factory building .
How should the company account for Rs. ,; lacs and Rs. *;+ lacs.
9. 4igh Seas 5td.% has been operating <ve passenger vessels in the coasts of =ndia in addition
to plying passenger as well as )argo vessels both on =nland and =nternational waters.
-s on '*
st
.arch year ended ,+*9 the status of the cargo vessels was as follows >
i2 7essel 3-4 was loading ,+%+++ .! of ?heat at )alifornia port at a freight rate of
@S A ,++ per .!. !he vessel is eBpected to leave the port on ,.9.,+*9
ii2 7essel 384 was at Cuwait Dort discharging food items. !he freight <Bed by
/overnment of =ndia for this voyage was Rs.E+.++ la"hs. !his vessel was
bombarded and destroyed on *.9.,+*9 in an altercation with =raqi forces.
iii2 7essel 364 was on half way to 8ombay port from Hamburg carrying cargo with
freight worth Rs.**+.++ la"hs.
iv2 7essel 3#4 has been waiting at /oa port since F+ days for berthing and
discharging of cargo with freight worth Rs.*'+.++ la"hs.
=n all the above cases E+G of the freight was prepaid in advance and the remaining *+G was to
be paid on completion of discharge of cargo. !he accounting policy of the company was to
recogni$e the entire freight value contracted as revenue and provide for the eBpenditure to be
incurred to complete the voyage. =s this correct H