Discuss the practice of transferring of profits

Assignment Help Accounting Basics
Reference no: EM131791785

The balance sheet of Platinum Ltd. as on 31st march 2016 is as below

Liabilities

Amount

Assets

Amount

Share capital

4000 shares of Rs 100 each fully paid

General Reserve

Profit and loss Account

Sundry creditors

Income tax reserve

Total

 

 

400000

80000

64000

256000

120000

920000

Land and building

Plant and machinery

Patents

Stock

Debtors

Bank

Preliminary Expenses

Total

220000

260000

40000

96000

176000

104000

24000

920000

The expert valuer valued land and building at Rs 480000, Goodwill at Rs 320000 and Plant and machinery at Rs 240000. Out of the total debtors, it is found that debtors of Rs 16000 are bad. The profits of the company for the three years ended on March 31st have been as follows:

1999- Rs 160000, 2000- Rs 180000, 2001- Rs 212000. The company follows the practice of transferring 25% of profits to general reserve. Similar type of companies earns 10% of the value of their shares. Ascertain the value of shares of company under fair value method.

Reference no: EM131791785

Questions Cloud

Prepare the adjusting entries to record bad debt expense : Prepare the adjusting entries to record bad debt expense, assuming that the estimate of uncollectibles is determined by taking
Colorado civil rights commission : Consider Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission.
Security agreement included an after-acquired property : The security agreement included an after-acquired property clause covering future equipment ABC might acquire.
How many customer should we expect for our sample percentage : Juice According to a leading juice company, mixed fruit juice makes up 35% of the total sales. Suppose we examine 200 random customers.
Discuss the practice of transferring of profits : The company follows the practice of transferring 25% of profits to general reserve
Different entrepreneurial branding strategies : identify companies that have used each of these different entrepreneurial branding strategies and analyze their success in implementing strategies.
What is the expected dollar return on plan assets : George Corporation has a defined benefit pension plan for its employees. The following information is available for 2014.
Various vertical and horizontal types of restraints of trade : Describe the various vertical and horizontal types of “restraints of trade.” Which types analyzed are the most unfair? Why?
What value should we expect for our sample percentage of ts : Random Letters Samuel Morse suggested in the nineteenth century that the letter "t" made up 9% of the English language. Assume this is still correct.

Reviews

Write a Review

Accounting Basics Questions & Answers

  What will be the amount of cash received by downey

Hilliard, Downey, and Petrov are partners sharing income 3:2:1. After the firm's loss from liquidation is distributed, the capital account balances were: Hilliard, $24,000 Dr.; Downey, $90,000 Cr.; and Petrov, $64,000 Cr.

  What are at least three international accounting standards

What are at least three International Accounting Standards? Are these standards the same as U.S. standards? Explain your response.

  A cardboard poster containing 32 in2 of printed region is

a cardboard poster containing 32 in2 of printed region is to have a margin of 2 in at top and the bottom and 43in at

  Prepare a horizontal and vertical analysis

prepare a horizontal and vertical analysis for the period ending June 30, 2017. You only need to complete one vertical analysis using the June balance sheet

  Prepare the journal entry to correct the error assuming

Prepare the journal entry to correct the error assuming it is discovered before the books are adjusted or closed in 2011. (Ignore income taxes.)

  Describe how to make 50 ml of the following 10x gel

describe how to make 50 ml of the following 10x gel electrophoresis loading buffer 100 mm edta ph 8.0 0.1 wv

  Basic earning per share computation

Albacore issued a 10% stock dividend on June 30, 2009. On September 30, 2009, 12,000 shares of common stock were reacqured as treasure stock. What is the appropriate number of shares to be used in the basic earning per share computation for 2009?

  How percentage return will be earned by the customer

How percentage return will be earned by the customer if they make the payment

  Assume that income from operations amounts to 350000 and

assume that income from operations amounts to 350000 and top management has established 15 as the minimum rate of

  Discuss fortunately the company has no prior experience

One of its products contained an unknown bacteria that made several dogs ill. It is probable that the incident will result in liabilities for the company

  What is the net present value of a project

What is the net present value of a project with the cash flows, if the discount rate is 10 percent - How long will it take the firm to recover its initial investment in this project?

  Why an expense is not to be recognized in january indicate

For each of the transactions, if an expense is to be recognized in January, indicate the amount. If an expense is not to be recognized in January, indicate why.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd