Q-2 Given below are the extracts from the balance sheet of Bharat & Sheena Ltd. as at 31" March, 2022: Particulars Rs Equity share capital (shares of Rs 10 each fully paid-up) 80,00,000 12% Pref. share capital (Shares of Rs 100 each fully paid up) 20,00,000 Reserves and surplus 40,00,000 10% debentures 40,00,000 GMTESTSERIES.COM Current liabilities Goodwill Fixed tangible assets 10% trade investments Current assets 20,00,000 8,00,000 1,20,00,000 20,00,000 52,00,000 Additional Information: (i) Profit after tax @ 40%. 2019-2020: Rs 24,00,000, 2020-2021: Rs 36,00,000, 2021- 22: Rs 30,00,000 (ii) Trade investments are to be valued at 150% of face value (i.e. Rs 16,00,000) (iii) 60% debentures are to be redeemed prior to valuation of shares. (iv) Rate of Income tax-30% with effect from 1st April, 2022. org (v) Normal rate of return on net assets for equity shareholders is 10% (vi) Goodwill is to be valued at 3 years' purchase of super profits. Required: 1) Calculate goodwill ii) Calculate net asset value of an equity share Calculate yield based value of an equity share iv) Calculate the fair value of an equity share

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Q-2 Given below are the extracts from the balance sheet of Bharat & Sheena Ltd. as at 31"
March, 2022:
Particulars
Rs
Equity share capital (shares of Rs 10 each fully paid-up)
80,00,000
12% Pref. share capital (Shares of Rs 100 each fully paid up)
20,00,000
Reserves and surplus
40,00,000
10% debentures
40,00,000
GMTESTSERIES.COM
Current liabilities
Goodwill
Fixed tangible assets
10% trade investments
Current assets
20,00,000
8,00,000
1,20,00,000
20,00,000
52,00,000
Additional Information:
(i) Profit after tax @ 40%.
2019-2020:
Rs 24,00,000, 2020-2021:
Rs 36,00,000, 2021-
22:
Rs 30,00,000
(ii) Trade investments are to be valued at 150% of face value (i.e. Rs 16,00,000)
(iii) 60% debentures are to be redeemed prior to valuation of shares.
(iv) Rate of Income tax-30% with effect from 1st April, 2022.
org
(v) Normal rate of return on net assets for equity shareholders is 10%
(vi) Goodwill is to be valued at 3 years' purchase of super profits.
Required:
1)
Calculate goodwill
ii)
Calculate net asset value of an equity share
Calculate yield based value of an equity share
iv)
Calculate the fair value of an equity share
Transcribed Image Text:Q-2 Given below are the extracts from the balance sheet of Bharat & Sheena Ltd. as at 31" March, 2022: Particulars Rs Equity share capital (shares of Rs 10 each fully paid-up) 80,00,000 12% Pref. share capital (Shares of Rs 100 each fully paid up) 20,00,000 Reserves and surplus 40,00,000 10% debentures 40,00,000 GMTESTSERIES.COM Current liabilities Goodwill Fixed tangible assets 10% trade investments Current assets 20,00,000 8,00,000 1,20,00,000 20,00,000 52,00,000 Additional Information: (i) Profit after tax @ 40%. 2019-2020: Rs 24,00,000, 2020-2021: Rs 36,00,000, 2021- 22: Rs 30,00,000 (ii) Trade investments are to be valued at 150% of face value (i.e. Rs 16,00,000) (iii) 60% debentures are to be redeemed prior to valuation of shares. (iv) Rate of Income tax-30% with effect from 1st April, 2022. org (v) Normal rate of return on net assets for equity shareholders is 10% (vi) Goodwill is to be valued at 3 years' purchase of super profits. Required: 1) Calculate goodwill ii) Calculate net asset value of an equity share Calculate yield based value of an equity share iv) Calculate the fair value of an equity share
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