Mohan took a mine on lease. Royalty is paid half-yearly @ 50 P. per ton. Minimum Rent per year is ? 6.000 Each war's shortworkings can be recouped in the first three years of the lease. Following are the yields: Ton
First year upto 30th September 31st March
Second year upto 30tb September 31st March
Third year upto 30th September 31st March
4.000
7,000
6J00 5.000 8,000 5,000
in the Mohan's book.
Answers
Answer:
He will have to pay Rs. 16,000 to Y for the 2nd year [since actual royalty (16,000 = 8,000 × 2) is more than the Minimum Rent.].
Explanation:
The term "Minimum Rent," "Dead Rent," etc., refers to this minimal sum. To be paid to the lessor is the Minimum Rent or the actual royalty, whichever is higher. For example, X leased a mine from Y at a Minimum Rent of Rs. 12,000 p.a. merging a royalty of Rs. 2 per tonne of coal raised.
Now, if the amount raised in the first year was 4,000 tonnes and in the second year was 8,000 tonnes, in that case, X will be required to pay Y the Minimum Rent for the first year, which is Rs. 12,000 [because the Actual Royalty (8,000 = 4,000 2) is less than the Minimum Rent]. Instead, he will be required to pay Y Rs. 16,000 for the following year [because true royalty
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