the following is the balance sheet of good morning ltd as at 31 march 2010 619519
The following is the balance sheet of Good Morning Ltd. as at 31 March 2010:
|
Liabilities |
Assets |
||
|
Share Capital: |
|
Fixed Assets: |
|
|
Equity Shares of |
20,00,000 |
Goodwill |
2,00,000 |
|
Rs.100 Each |
|
Machinery |
10,00,000 |
|
Less: Calls In |
2,00,000 |
Factory Shed |
11,00,000 |
|
Arrears (!20 on |
|
Vehicle |
3,00,000 |
|
Final Call) |
|
Furniture |
1,00,000 |
|
|
18,00,000 |
|
|
|
10% Preference |
8,00,000 |
Investments |
4,00,000 |
|
Shares of Rs. 10 |
|
Current Assets: |
|
|
Each Fully Paid |
|
Stock In Trade |
8,00,000 |
|
Reserves & |
|
Sundry Debtors |
14,00,000 |
|
Surplus: |
|
|
|
|
General Reserve |
8,00,000 |
Cash At Bank |
2,00,000 |
|
Profit & Loss A/c |
6,00,000 |
Miscellaneous |
|
|
Current Liabilities: |
|
Expenditure: |
|
|
Bank Loan |
4,00,000 |
Preliminary |
1,00,000 |
|
Sundry Creditors |
12,00,000 |
Expenses |
|
|
|
56,00,000 |
|
56,00,000 |
Additional information:
- Fixed assets are worth above their book value. Depreciation on approved value of fixed assets is not to be considered for valuation of goodwill.
- Of the investment, 60% is non-trading and the balance is trading. All trade investments are to be valued at 25% the above cost. A uniform rate of dividend @ 15% is earned on all investments.
- For the purpose of valuation of shares, goodwill is to be considered on the basis of 4 years’ purchase of the super profits based on average profit (after tax) of the last 3 years. Profits (after tax) are as follows:
|
|
|
|
2007–08 |
8,00,000 |
|
2008–09 |
8,60,000 |
|
2009–10 |
9,00,000 |
- In a similar business, return on capital employed is 15% (after tax).
- In 2007–08, new machinery costing Rs.40,000 was purchased but wrongly charged to revenue (no effect has been given yet for rectifying the same) Depreciation on machinery is charged @ 10% on reducing balance method. Find out the value of each fully paid and partly paid equity share on net assets basis