Following information of BS Products Ltd. is given: Goods of 2,00,000 sold to Den Ltd. on 20-03-2023 but at the request of the buyer these were…

Case (i) The sale is complete, but delivery has been postponed at buyer's request. BS Products Ltd. should recognize the entire sale of 2,00,000 for the year ended 31 st March, 2023. Case (ii) 20% goods lying unsold with consignee should be treated as closing inventory and sales should be recognized for 2,40,000 (80% of 3,00,000). In the case of consignment sale revenue should not be recognized until the goods are sold to a third party. Case (iii) In case of goods sold on approval basis, revenue should not be recognized until the goods have been formally accepted by the buyer or the buyer has done an act adopting the transaction or the time period for rejection has elapsed or where no time has been fixed, a reasonable time has elapsed. Therefore, revenue should be recognized for the total sales amounting to 4,00,000 as the time period for rejecting the goods had expired. Case (iv) As per the standard, “where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of raising any claim, the revenue recognition is postponed to the extent of uncertainty involved. In such cases, the revenue is recognized only when it is reasonably certain that the ultimate collection will be made". In this case, interest should be recognized only if the ultimate collection is certain and the company expects to realize interest for the delayed payments for 50,000 only. Hence, based on the past experience, the realization of interest for the delayed payments by the agent is certain only to the extent of this amount and not - 60,000. Therefore, the interest income of 50,000 should be recognized in the books for the year ended 31 st March, 2023. Thus, total revenue amounting - 8,90,000 (2,00,000 + 2,40,000 + 4,00,000 + 50,000) will be recognized for the year ended 31 st March, 2023 in the books of BS Products Ltd.