Following is the Balance sheet of Jay Limited: Liabilities Equity Shares of Rs. 10 each Retained Earnings -VEGAAN 6% Preference Share of Rs.10 each General Reserve Debenture Redemption Fund 5% Debentures Sundry Creditors Total Liabilities Amoun Required: Calculate value per share by using following 1. Yield Method 2. Net Assets Method t 300,000 200000 Assets Fixed Assets Allowances for Depreciation 200,000 5,000 Preliminary Expenses 25,000 Unwritten Off Discount 60,000 90,000 880,000 Current assets Amoun t 600,000 (75,000) 340,000 10,000 5,000 Total Assets Current Assets include investments of Rs.50,000 market price of which is Rs.90,000. Debtors included in current assets are doubtful to the extent of Rs.25,000 for which no provision has been made so far. Debenture interest owes for two years and preference dividends are in arrear for two years. Earnings before tax is Rs.280,000 and Tax rate is 35%. The normal rate of dividend is 20%. 880,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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1
Following is the Balance sheet of Jay Limited:
Liabilities
Equity Shares of Rs. 10 each
Retained Earnings
}
VESHUR
6% Preference Share of Rs.10
each
General Reserve
Debenture Redemption Fund
5% Debentures
Sundry Creditors
Total Liabilities
Amoun
Required:
Calculate value per share by using following
1. Yield Method
2. Net Assets Method
t
300,000
200000
Assets
Fixed Assets
Allowances for
Depreciation
21 13303
90,000
880,000
200,000 Current assets
5,000 Preliminary Expenses
Unwritten Off Discount
25,000
60,000
Amoun
t
600,000
(75,000)
340,000
10,000
5,000
Total Assets
Current Assets include investments of Rs.50,000 market price of which is Rs.90,000. Debtors included in
current assets are doubtful to the extent of Rs.25,000 for which no provision has been made so far.
Debenture interest owes for two years and preference dividends are in arrear for two years.
Earnings before tax is Rs.280,000 and Tax rate is 35%. The normal rate of dividend is 20%.
880,000
Transcribed Image Text:1 Following is the Balance sheet of Jay Limited: Liabilities Equity Shares of Rs. 10 each Retained Earnings } VESHUR 6% Preference Share of Rs.10 each General Reserve Debenture Redemption Fund 5% Debentures Sundry Creditors Total Liabilities Amoun Required: Calculate value per share by using following 1. Yield Method 2. Net Assets Method t 300,000 200000 Assets Fixed Assets Allowances for Depreciation 21 13303 90,000 880,000 200,000 Current assets 5,000 Preliminary Expenses Unwritten Off Discount 25,000 60,000 Amoun t 600,000 (75,000) 340,000 10,000 5,000 Total Assets Current Assets include investments of Rs.50,000 market price of which is Rs.90,000. Debtors included in current assets are doubtful to the extent of Rs.25,000 for which no provision has been made so far. Debenture interest owes for two years and preference dividends are in arrear for two years. Earnings before tax is Rs.280,000 and Tax rate is 35%. The normal rate of dividend is 20%. 880,000
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