Let me any body confirm that question 2(a) is correct or not, In the problem they have given 75000 equity shares of Rs.100 each = 75,00,000. On this 20% means = 15,00,000. Total available profit = 10,00,000. How can we distribute... If that share value will Rs.10 we can do that, please clarify..
17 Replies
sakshi
(student)
(57 Points)
Replied 28 May 2014
Yaa you are right i also find the same problem as u have but i did it with 1500000 and shown the method of computing staff bonus . Rest in the hands of icai. Lets see what happened
bhargav
(student)
(91 Points)
Replied 28 May 2014
Thanks for reply.. lets wait to see what happens..
Sunny Bhatia
(article assistant)
(128 Points)
Replied 28 May 2014
will thy giv full marks? i hav too worked out tat question... hw do we confirm abt it?
N.Naveena Maheswara Rao
(Assistant manager for accounts)
(1096 Points)
Replied 28 May 2014
Yes. Question was wrong. If we take 10/- as share price. Answer will be as follows
|
Current year Profit |
1,000,000 |
|
Less: Depreciation |
37,500 |
|
Tax provision |
120,000 |
|
Balance available for appropriations |
842,500 |
|
Less: Transfer to reserve (842,500 * 25%) |
210,625 |
|
Staff bonus provision (75,000 X 100 X 20% X 10%) |
15,000 |
|
Balance available for distribution of dividend |
616,875 |
|
Less: Preference dividend (12,000 X 100 X 15%) |
180,000 |
|
Less: Equity dividend (75,000 X 100 X 20%) |
150,000 |
|
Balance |
286,875 |
|
Less: Carried forward profit (12,000 X 100 X 14%) |
168,000 |
|
Balance for additional dividend |
118,875 |
|
Distribution of additional dividend |
|
|
Balance for additional dividend |
118,875 |
|
To preference share holders (1/3) |
39,625 |
|
To equity share holders (2/3) |
79250 |
|
Net balance of P&L |
|
|
Op. balance in P&L |
150,000 |
|
Carried forward current year profit |
168,000 |
|
Net balance in P&L |
318,000 |
N.Naveena Maheswara Rao
(Assistant manager for accounts)
(1096 Points)
Replied 28 May 2014
If we take 100/- as share value. answer is as below. We need not pay equity dividend in case of insuffitient profits
|
Current year Profit |
1,000,000 |
|
Less: Depreciation |
37,500 |
|
Tax provision |
120,000 |
|
Balance available for appropriations |
842,500 |
|
Less: Transfer to reserve (842,500 * 25%) |
210,625 |
|
Staff bonus provision (75,000 X 100 X 20% X 10%) |
150,000 |
|
Balance available for distribution of dividend |
481,875 |
|
Less: Preference dividend (12,000 X 100 X 15%) |
180,000 |
|
Balance |
301,875 |
|
Less: Carried forward profit (12,000 X 100 X 14%) |
168,000 |
|
Balance for additional dividend |
133,875 |
|
Distribution of additional dividend |
|
|
Balance for additional dividend |
133,875 |
|
To preference share holders (1/3) |
44,625 |
|
To equity share holders (2/3) |
89,250 |
|
Net balance of P&L |
|
|
Op. balance in P&L |
150,000 |
|
Carried forward current year profit |
168,000 |
|
Net balance in P&L |
318,000 |
bhargav
(student)
(91 Points)
Replied 28 May 2014
Don't know about that, have to pay or not for equity dividend..
In question given that "after making provision (1), (2), (3) mentioned above"
So without paying to equity shares how can we calculate..
bhargav
(student)
(91 Points)
Replied 28 May 2014
2(b) is per and post incorporation profit.. and 5(b) from h.purchase and 7(a) from Non trading concern , 7(b) cash flow statement
Gourav Kapoor
(CA Final Student)
(2977 Points)
Replied 28 May 2014
hey gys .. u all dont wrry abt anything .. just stay focussed on ur next exam.. if there is any mistake reg question in exam.. then ICAI will deal it with in right manner.. normally if anything like that happen from ICAI.. then ICAI give proportionate marks to each student but only those who hav attempted that particular question... so dont wrry abt it. ICAI wil deal with it.. TRUST ICAI.. and all the best for ur next exam
rajeev
(nnnone)
(224 Points)
Replied 28 May 2014
The question was right and we have to calculate bonus by taking it x and susquently decreasing x- eqd pref. Div. Because the bonus calculation method is not provided in question and equity dividend and pref. Dividend has to be calculated after deducting x that is bonus.
Refer parveen sharma book , similar question is there.
shashank
(partner)
(22 Points)
Replied 28 May 2014
If I did not attempt the sbove qurstion any benefit could be given by ICAI
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