The Bengal Mines Company Limited took from Mr. N. Tiwari a
lease of a mine for a period of 25 years from 1-1-2006, on a
royalty of Rs. 5 per tonne of mineral raised with a dead rent of
Rs. 20,000 and power to recoup Shortworkings during the first
five years of the lease. The annual outputs were as follows:
2006 – 2,000 Tonnes
2007 – 3,000 Tonnes
2008 – 4,000 Tonnes
2009 – 5,000 Tonnes
2010 – 5,500 Tonnes
Prepare Shortworkings Account in the books of Lessee.
Answers
Amount of royalty will be gross amount of royalty (inclusive of TDS), that will be charged to profit and loss account. For example, if royalty amount is 1,000,000/-& rate of TDS is 10%, then lessee will pay Rs. 900,000/- to lessor. Amount of royalty charge to profit and loss account will be Rs.
The Journal Entries given above assume that there is a clause on Minimum Rent and Recoupment of Short- working subsequently written to the lessee.
The Journal Entries given above assume that there is a clause on Minimum Rent and Recoupment of Short- working subsequently written to the lessee.Royalties based on output should be debited to Manufacturing or Production Account whereas royalty based on sales be treated as selling expenses should be debited to Trading Account or Profit and Loss Account.
Explanation:
A biography, or simply bio, is a detailed description of a person's life. It involves more than just the basic facts like education, work, relationships, and death; it portrays a person's experience of these life events. ... Works in diverse media, from literature to film, form the genre known as biography.