Ram Ltd. acquire the lease of a mine from shyam Ltd. on the following terms Minimium rent of rs. 50000 is payable per annum. Royalty is rs. 2 per tone production.
Shortworking are recoverable in next two years on the following terms.
Only 50% of the excess earning over minimum rent may be used for this purpose
Shortworking cannot be recovered over 8000 p.a.
No Shortworking may be carried forward for recoupment if output falls below 10000 per tons in any year
Output for the first five years was
14000,16000,8000,40000,50000 respectively.
Show necessary ledger account in the books of less books are closed on 31st Dec. Every year. Ram Limited acquired the lease of a mile from Shyam Limited
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