By taking the data of question 2, if in case each scooter can raise only one claim during the period of three year. During the year 2010-11, 50 scooters were repaired at a cost of ₹1,700 each and another 50 were replaced at a cost of ₹3,200 each. Show how subsequent measurement of these provisions should be made in the year 2010–11.

Data from Equation 2

The manufacturer of automatic gear scooters gives a warranty of three years on every scooter for the repair or replacement of the scooters that fail to perform as per the specification. Past experience reveal that on an average 5% of the scooters require repair costing ₹2,000 each and another 1% requires replacement costing ₹5,000 each. During the year 2009–10, the company sold 16,000 scooters. Show how provision is to be recognized in the annual accounts.