Question

5.
5.
5,00,000
Ans. 10 * Equity Share Value 10.12, 100
On 31st March, 2014 the Balance Sheet of Ramesh Ltd. was as follows:
Balance Sheet
Particulars
I. EQUITY AND LIABILITIES
Shareholders' funds :
Share capital
5,000 Shares of 100 each fully paid
Reserves and surplus
Statement of Profit & loss
Dividend equalisation fund
Non-current liabilities :
Bank overdraft
Current liabilities :
Trade payables
Other current liabilities:
Short-term provisions :
Provision for taxation
1,03,000
75,000
1
20,000
77,000
45,000
8,20,000
II. ASSETS:
Non-current assets :
Fixed assets :
Tangible assets :
Land and building
2,20,000
Plant and machinery
95,000
Current assets :
Inventories
3,50,000
Trade receivables
1,55,000
8,20,000
The net profits of the company, after deducting all working charges and providing depreciation and
taxation were as under:
2009-10 785,000; 2010-11 7 96,000; 2011-12 3 90,000; 2012-13 * 1,00,000; 2013-14 795,000.
On 31st March, 2014 Land and Building were valued at $2,50,000 and Plant and Machinery at 7
1,50,000. In view of the nature of the business, it is considered that 10% is a reasonable return on
tangible capital.
Find out the value of the Company's share after taking into account the revised values of fixed assets
and your own valuation of goodwill based on five years purchase of the annual super profits.
Calculate super profit on average capital employed for this purpose.​

Answer 1

Answer:

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