Page 310 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Particulars Particulars
To salaries, wages & bonus 4,81,250 By gross profit 22,50,000
Unit 12: Divisible Profits and Managerial Remuneration
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 Notes
To manager’s salary 75,000
To commission to manager 15,000
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
Depreciation as per Income Tax Rules amounts to 2,02,000. Calculate the managerial

remuneration.
14. Following are the relevant balances taken from the books of Shashi Ltd. You are required
to calculate the remuneration of the managing director at 5% of the profit ascertained
according to the Companies Act. Find out the excess amount, if any, paid to him.

Net profit 69,279
Items considered for arriving at the above net profit:
(a) provision for taxation 1,05,455
(b) managing director’s remuneration 13,552
(c ) preliminary expenses 10,500

(d) director’s fees 7,000
(e) provision for doubtful debts 21,000
(f) depreciation 33,810

(g) depreciation allowed as per schedule XIV 31,500
(h) donation to sister concerns 10,500
(i) ex-gratia payment to employees 3,500
15. Determine the maximum remuneration available to the part-time director and manager
of the Ankit Tyres Co. Ltd., (a manufacturing company) under sections 309 and 387 of the
Companies Act, 1956, from the following particulars:

Before charging any such remuneration the profit and loss account showed a credit balance
of 9,90,000 for the year ended 31st December, 2005 after taking into account the following
matters:

(a) capital expenditure 2,25,000
(b) subsidiary received from central government 1,80,000
(c ) special depreciation 30,000
(d) multiple allowance 45,000
(e) bonus to foreign technicians 1,35,000

(f) provision for taxation 12,00,000
(g) compensation paid to injured worker 30,000
(h) ex-gratia payment to an employee 15,000

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