income tax 50 has been payable on these profits dividends have been distributed from 619449
Ascertain the value of goodwill of Sudarsan Ltd. carrying on business from the following:
Liabilities |
Assets |
||
Paid-up Capital: |
Goodwill at Cost |
2,00,000 |
|
2,00,000 Shares of Z 10 Each Fully Paid |
20,00,000 |
Land & Building at Cost |
9,00,000 |
Bank Overdraft |
3,00,000 |
Plant & Machinery at Cost (Less |
8,00,000 |
Sundry Creditors |
7,00,000 |
Depreciation) |
|
Provision for Taxation |
3,75,000 |
Stock in Trade |
12,00,000 |
Profit and Loss Appropriation A/c |
5,00,000 |
Book Debts (Less Provision for Bad |
7,75,000 |
Debts) |
|||
38,75,000 |
38,75,000 |
The Company started operations in 2005 with paid-up capital as aforementioned of 20,00,000. Profits earned before providing for taxation have been as follows:
Year Ended 31 March |
|
2006 |
6,00,000 |
2007 |
7,00,000 |
2008 |
8,00,000 |
2009 |
5,00,000 |
2010 |
9,00,000 |
Income tax @ 50% has been payable on these profits. Dividends have been distributed from the profits of first 3 years @ 10% and from those of next 2 years @ 15% of the paid-up capital.