What should be Accounting Entry if High Court has ordered to reconstruct Balance Sheet of a Company?
R Ltd. holds 21.600 Shares in Q Ltd. . This represents 15% of the share capital of that company . Q Ltd. is not a quoted company . The average net profit (after tax) of the company is Rs.2,50,000 . The shares would be valued based on 12% Capitalization rate .
[Note : In Balance Sheet of R Ltd. ->> Assets Side : Investment in Share in Q Ltd. at cost Rs.3,24,000]
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