Anshu (Student) (71 Points)
16 January 2015Please explain the meaning of following adjustment
The incremental profits earned by S ltd for the period Jan 09 to March 09 over that earned in the corresponding period 2008 is Rs 60000. Does it mean its the total profit earned for the three months or corresponding previous year profit + 60000= total profit earned for the three months.
In the answer, to arrive at the Profit earned till March 09, they have added the incremental profit to the profit as on 31st Dec 08. Is it correct?
Mudala Srinivas Kumar
(Head - Finance/Accounts)
(42 Points)
Replied 16 January 2015
Dear Anshu
Your question is very clear.The word used is incremental. Thus the answer would be Profit for the period Jan'09 to Mar'09 + Rs 60,000
Illustration:
1) Profit earned during Jan'08-Mar'08 is Rs 30,000
2) Thus the profit earned during Ja'09-Mar;09 would be Rs 90,000(Rs30000+Rs60000)
Thus the total Profit earned during the F.Y April'08 to March'09 would be Profit earned upto Dec'08 + Rs 90,000
Hope the issue is clear.
Regards
M.Srinivas Kumar
Bangalore
-09986178069
Anshu
(Student)
(71 Points)
Replied 16 January 2015
Thank You Sir. If you could please look into the 4th Illustration in the following link.
The 6th Adjustment in the question and the treatment in Point (vii) of working note 1, where they have calculated the reserves as on 31.3.09
https://s3.amazonaws.com/caclubindia/cdn/forum/files/555789_715186_1_ca_final.pdf
Mudala Srinivas Kumar
(Head - Finance/Accounts)
(42 Points)
Replied 16 January 2015
Which chapter r u referring to? I am not clear
Mudala Srinivas Kumar
(Head - Finance/Accounts)
(42 Points)
Replied 16 January 2015
Yes the treatment is o.k.because it is a realized gain(realized in cash)
Anshu
(Student)
(71 Points)
Replied 17 January 2015
Anshu
(Student)
(71 Points)
Replied 17 January 2015
Anshu
(Student)
(71 Points)
Replied 17 January 2015
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India
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