Page 309 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes 11. Net profit to Akash Ltd. is 7,00,000 for the year ending on 31st December, 2005. The
following amounts have also been recorded in the profit and loss a/c:

(a) Bounties received from government 1,00,000
(b) Bonus paid to foreign technicians 75,000
(c) Repair of capital nature 1,25,000
(d) Depreciation (extra shift allowance of 32,500 is included in it) 1,12,500

(e) Provision for taxation 10,00,000
(f) Investment allowance reserve 1,25,000
(g) Compensation paid to an injured employee 20,000
(h) Terminal depreciation of a machine 12,500

(i) profit on sale of investment 20,000
Now find out:
(i) Manager and directors are in the company. Find out maximum remuneration payable
to directors.
(ii) if there is one manager and three other directors in the company, what will be their
maximum remuneration?

12. Following is the profit and loss a/c of Sanjna Ltd. for the year ending 31st December, 2005:
Particulars Particulars
To salaries 4,25,000 By gross profit 6,50,000
To discount 20,000 By profit on sale of machinery 75,000
To carriage outward 10,000
To general expenses 25,000
To interest on unsecured loans 25,000
To provision for tax 45,000
To net profit 1,75,000
7,25,000 7,25,000

Written down value of that machinery whose profit is given in the above p. & l. A/c is
1,00,000. Its cost is 1, 25,000. Find out the maximum remuneration payable to directors
when the company has a whole-time director or managing director or manager.

13. The manager of XYZ Ltd. is entitled to get a salary of 6,250 per month plus 1% commission
on the net profit of the company after such salary and commission. The following is the
profit and loss A/c of the company for the year ended 31st march, 2005:
Particulars Particulars
To salaries, wages & bonus 4,81,250 By gross profit 22,50,000
To general exps. 1,85,000 By subsidy from government 1,50,000
To expenditure on 2,05,000 By profit on sale of assets (cost price 2,50,000
of 6,25,000 and written down value
4,50,000).
Scientific research (cost of an apparatus) 35,000 Contd...
To manager’s salary 75,000
To commission to manager 15,000
LOVELY PROFESSIONAL UNIVERSITY
302 To reserve for b/d. 43,750
To provision for income tax 6,00,000
To proposed dividend 2,50,000
To balance c/d 7,60,000
26,50,000 26,50,000