As my friend has correctly calculated that there is undervaluation of stock by Rs 6000/=
The effect of this stock undervaluation will be shown in schedule of changes in working capital as Increase in stock [75000-(54000 + 6000)], since stock is current asset and will have its effect in Schedule of changes in working capital.
As my friend has correctly calculated that there is undervaluation of stock by Rs 6000/=
The effect of this stock undervaluation will be shown in schedule of changes in working capital as Increase in stock [75000-(54000 + 6000)], since stock is current asset and will have its effect in Schedule of changes in working capital.
30% will be calculated on opening balance and then from the amount so obtained deducted debenture already redemed an balance will be redeemed now.
(Guest)
why you all say that it should be calculated on opening balance.?
Practically if you see debentures redeemed is Rs100000/- When you all say that redemption premium is calculated on op. bal, are we not doing wrong by not providing on actual deb. redeemed?
In a way debenture consist of many debenture holders. By doing on opening balance we might leave out some debentures who are actually been redeemed in that Rs 100000/-
as per your example which is given as beblw you are right./././
Thanks for solving my problem related to this question./././
i hope miss dimple is also understood... what you want to say in example
Dimple
Regarding debenture doubt---
Suppose op bal of deb. is 200000 and cl. bal of deb. 100000. It means there is redemption of Rs 100000 of debenture.As per your doubt u said 30% of debentures is redeemed at 103. So on Rs100000 debentures redeemed you calculate premium on redemption @ Rs 3 or 3% which will be Rs 900/=
Moreover, debentures are shown at face value in balance sheet. If co. decides to show premium on redemption, it will be shown seperately and will not be clubbed with Debentures.
In fund flow statement you show 100900 as application .
In adjusted P&l A/c you debit premium on redemption of deb. by Rs900/=.
The value taken by me is imaginary. you take values as per your sum.
Hope you have understood..
(Guest)
@ pradip,
I am saying why you all are saying it will be calculated on op. bal. If that is the case what will be your ans when i change Dimple question as redeemed deb @ 103. If you see me reply i have calculated on difference bcz that is only getting redeemed.
I need reason for your logic.
Dont take it otherwise. I just want to have clarification on that.