Reserve & surplus

amit (Accountant) (96 Points)

07 February 2018  

sir

a private limited company has 12 Lacs in its reserves & surplus.

in next year, the Net profit (after tax) is Rs 8 Lacs. it is T/f to Res & Surplus Account, now total is 20 Lacs in it.

similary, next year, it will increase again (in case of profit).

Then, how & when can this balance of Reserve & Surplus be used ?