Question
Company A sold machinery having a WDV of ₹ 40 lakh to
Company B for ₹ 50 lakh (FV ₹ 50 lakh) and the same machinery was leased back by Company B To Company A. The Lease back is in nature of operating Lease. Being an Auditor suggest the treatment to Company A.Solution
As an auditor, I would suggest that Company A should recognize the profit of ₹10 lakh immediately. In this scenario, Company A has sold the machinery to Company B for ₹50 lakh, even though the written-down value (WDV) of the machinery was ₹40 lakh. The difference of ₹10 lakh between the selling price and the WDV represents a profit on the sale of the machinery. Since the leaseback arrangement is in the nature of an operating lease, and not a finance lease, Company A should recognize the entire profit of ₹10 lakh immediately at the time of the sale. Operating leases are typically treated as normal rental agreements, and any profit or loss on the sale should be recognized upfront.
- Suppose both the roots of q² + kq + 49 = 0 are real and equal, then determine the value of 'k'.
I. 14p² + 9p - 8 = 0
II. 4q² - 19q + 12 = 0
I. 2y2 + 13y + 15 = 0
II. 2x2 + 11 x + 12 = 0
I. 35x² - 46x – 16 = 0
II. 35y² - 116y + 96 = 0
Equation 1: x² - 220x + 12100 = 0
Equation 2: y² - 210y + 11025 = 0
I. x ² + 5 x + 6 = 0
II. y²+ 7 y + 12= 0
...I. x2 – 13x + 36 = 0
II. 3y2 – 29y + 18 = 0
I. 35x² - 51x + 18 = 0
II. 30y² + 17y – 21 = 0
I. p2 – 2p – 15 = 0
II. q2 + 4q – 12 = 0
I. 7x² + 27x + 18 = 0
II. 19y² - 27y + 8 = 0