Following was the Balance Sheet of X Ltd. as on 31 March, 2008.fEquity and Liabilities3)Share Capital40,000 Equity Share of 20 each8,00,0001,80,00040,0002,00,000General ReserveStaterment of P&L12% DebenturesCurrent Liabilities2,60,000Total14,80,000Assets(2)Fixed Assets10,00,000Current Assets4,00,000Goodwill80,00014,80,000On 31" March, 2008, Fixed Assets were valued as R 7,00,000 and the goodwill atR 1,00,000. The net profits for the past three years were; 2005-06: 1,03,200, 2006-07:1,04,000, and 2007-08: 1,03,300. 20% of profits are transferred to reserves. The proportion isreasonable for company. Fair investment return may be taken at 10%o. Ignore taxation. Calculatethe value of share as per (i) Net Assets Method, (ii) Yield Method.

It is called as asset method as valuation is done on the basis of assets, net assets are calculated…

Following was the Balance Sheet of X Ltd. as on 31" March, 2008. Equity and Liabilities (2) Share Capital 40,000 Equity Share of 20 each General Reserve Statement of P&L 12% Debentures 8,00,000 1,80,000 40,000 2,00,000 2,60,000 Current Liabilities Total 14,80,000 Assets (2) Fixed Assets 10,00,000 Current Assets 4,00,000 Goodwill 80,000 14,80,000 On 31 March, 2008, Fixed Assets were valued as 7,00,000 and the goodwill at R 1,00,000. The net profits for the past three years were; 2005-06: 1,03,200, 2006-07: R1,04,000, and 2007-08: 1,03,300. 20% of profits are transferred to reserves. The proportion is reasonable for company. Fair investment return may be taken at 10%. Ignore taxation. Calculate the value of share as per (i) Net Assets Method, (ii) Yield Method.

Following was the Balance Sheet of X Ltd. as on 31" March, 2008. Equity and Liabilities (2) Share Capital 40,000 Equity Share of 20 each General Reserve Statement of P&L 12% Debentures 8,00,000 1,80,000 40,000 2,00,000 2,60,000 Current Liabilities Total 14,80,000 Assets (2) Fixed Assets 10,00,000 Current Assets 4,00,000 Goodwill 80,000 14,80,000 On 31 March, 2008, Fixed Assets were valued as 7,00,000 and the goodwill at R 1,00,000. The net profits for the past three years were; 2005-06: 1,03,200, 2006-07: R1,04,000, and 2007-08: 1,03,300. 20% of profits are transferred to reserves. The proportion is reasonable for company. Fair investment return may be taken at 10%. Ignore taxation. Calculate the value of share as per (i) Net Assets Method, (ii) Yield Method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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