ABC Limited, an FMCG company specializing in cosmetics, is currently facing a lawsuit from a
consumer demanding INR 5,00,000 for allegedly misleading consumers with misinformation. With
the verdict still pending, how should the company reflect this situation in the balance sheet and
P&L statement for the quarter in which the lawsuit was filed?
6406533823080.
Cash balance would reduce by INR 5,00,000 to account for the law suit.
6406533823081.
Expenses would increase by INR 5,00,000
6406533823082.
No impact in balance sheet and P&L statement
6406533823083.
Cash balance would reduce by INR 5,00,000 and expenses would increase by
the same amount to account for the law suit.
A published solution is not available for this question yet.
On January 1, 2017. XYZ Company started the year with a ₹ 400,000 in Retained Earnings, a ₹
150,000 balance in Common Stock, and a ₹ 300,000 balance in Additional Paid-in Capital. During
2017, the company earned net income of ₹ 40,000, declared a dividend of ₹ 10,000, and issued 900
additional shares of stock (par value of ₹ 1 per share) for ₹ 10,000. What is total stockholders'
equity on December 31, 2017?
6406533823084.
₹890,000
6406533823085.
₹900,000
6406533823086.
₹880,000
6406533823087.
None of these
A published solution is not available for this question yet.
ABC incorporation rented out an office space for running its business. It entered into an
agreement with the owner of the space on 1\(^{st}\) January 2025 and agreed to pay a monthly rent of
INR 1,00,000, payable on the 1\(^{st}\) of every month starting January 1\(^{st}\). How would this transaction
be recorded in the balance sheet and P&L statement prepared on 1\(^{st}\) January 2025?
6406533823092.
No impact on balance sheet and cashflow statement.
6406533823093.
Cash balance reduces by INR 1,00,000 and Expenses increases by the same
amount
6406533823094.
Cash balance reduces by INR 1,00,000 and create a new line item in asset
section titled “Right to use office space” as INR 1,00,000
6406533823095.
Cash balance reduces by INR 1,00,000
A published solution is not available for this question yet.
A company purchased machinery worth ₹ 7,50,000 on January 2nd from a vendor. The company
paid 50% of the amount in cash, and the remaining 50% was taken on credit from the vendor for
30 days. How many changes must be made to the balance sheet to account for this transaction?
A published solution is not available for this question yet.
