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Question - Orange Inc. is an Indian computer-manufacturing company. It sold 5000 computers during the current financial year (Year 1). All of the orders were delivered during the current year, although payments for 1500 computers were due to be received on 5th April (Year 2).
In the previous financial year (Year 0), the company had sold 4000 computers and had received the entire payment for all the orders in the same year.
Assume the price of each computer is 50,000 for both the current and previous financial years.
Orange Inc. adopts the financial year from 1st April to 31st March. The accountant of Orange Inc. prepares the financial statements based on both cash and accrual accounting systems on 1st April.
Based on this information, answer the question given below. (You may need a calculator.)
How much revenue (in crores) will be recorded in Year 1 as per cash accounting?
a. 17.5
b. 20
c. 25
d. 12.5
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