User Account

All Pages

How should the policy of refunding customers be disclosed

Assignment Help Financial Accounting
Reference no: EM133067375

Question - You have been asked to help prepare the financial statements of Merched Ltd for the year ended 31 March 20X3. Legal proceedings have been started against the company because of faulty products supplied to a customer. The company's lawyers advise that it is probable that the entity will be found liable for damages of £250,000. Explain how you would treat the probable damages arising from the legal proceedings in the financial statements. Refer, where relevant, to accounting standards.

During the year, the directors decided to offer refunds to dissatisfied customers, provided that these were claimed within three months of the date the goods were purchased. There are large notices explaining this policy on every floor of the store. Since the policy was introduced, refunds have been claimed on roughly 2% of all sales.

Prepare brief notes for the directors of Houghton Ltd to answer the following questions:

(a) When should a provision be recognised, according to IAS 37 Provisions, Contingent Liabilities and Contingent Assets?

(b) How should the policy of refunding customers be treated in the financial statements for the year?

(c) How should the policy of refunding customers be disclosed in the notes to the financial statements?

Reference no: EM133067375

Questions Cloud

Marginal analysis to evaluate proposal : Madison County currently allocates $400,000 to provide a special ambulance service for heart-attack victims and $1,200,000 for improvements in highway safety (b
What are the contents of a bank statement : Let's have a review on the discussion made about the basic documents and transactions related to bank deposits - What are the contents of a bank statement
Ethical values and standards important to the public sector : The model of how public administrators encourage ethical standards in encouraging public service duty, which two principles do you find the important to your go
Find the after-tax cash flow for the oven : A pizza place is considering investing $1000 for a new oven with a useful life of 4 years and a salvage value of $0. The oven is expected to generate $500 in re
How should the policy of refunding customers be disclosed : Explain how you would treat the probable damages arising from the legal proceedings in the financial statements
What economics in ukraine looks like : What Economics in Ukraine looks like? What are the industries? Industrial export? What percentage of export? What IT looks like in Ukraine?
What is break-even quantity : Your dartboard venture proves to be a success and so you are considering expanding your business by starting a division that specializes in making darts.
What is the equivalent rate : What is the equivalent rate with (a) continuous compounding and (b) semi annual compounding?
Determine the minimum amount of fine : Also find the market opportunity line and determine the minimum amount of fine such that there is no tax evasion at all.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd