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DIVIDEND DECLARATION

For calculation of dividend, condition 2 says maximum amount that can drawn =10% of (paid up capital +free reserves) ......in this free reserve includes ??????

GOKULA LAKSHMI

CA Inter

780

16-Mar-21 05:30

19

Yes ,[(paid up eq +preference capital)+ free reserves]Ã?10%

venkatesh sundharamoorthy

CA Inter

31K+

16-Mar-21 07:08

My question is what are free reserves???

GOKULA LAKSHMI

CA Inter

780

16-Mar-21 09:18

General reserve and profit and loss A/cl.

venkatesh sundharamoorthy

CA Inter

31K+

16-Mar-21 09:28

Then why we are not including net profit (refer pg.4.33 )

Attachments

0cfa80ab-f4ee-4f5f-9269-6925dbf6464d.jpg

GOKULA LAKSHMI

CA Inter

780

16-Mar-21 09:48

That calculation of 10% should done in opening balance that is previous year balance or latest audited financial statement

Attachments

70c582ab-8d7f-474e-88bd-5a67f2022751.jpg

venkatesh sundharamoorthy

CA Inter

31K+

16-Mar-21 10:06

Sorry this one doubt alone...why in example they subtracted preliminary expense where as in illustration 7 they didn't subtract

Attachments

e23d3588-edc0-47b7-a52d-0003e4559145.jpg

GOKULA LAKSHMI

CA Inter

780

16-Mar-21 10:28

Sorry this one doubt alone...why in example they subtracted preliminary expense where as in illustration 7 they didn't subtract

Preliminary expenses should not be shown in balance sheet, even though it was an intangible asset. see illustration 6 &7 preliminary expenses is directly deducted in statement of p&l ,but in the sum you attached ,the information given is after p and l -preliminary expenses was in the debit side of books. We need take it out ,p&l account was already prepared ,so we are deduct the preliminary expenses in (p&l) reserves and surplus. Is your doubt clear?

venkatesh sundharamoorthy

CA Inter

31K+

16-Mar-21 11:09

Yes thank you so much

GOKULA LAKSHMI

CA Inter

780

16-Mar-21 11:10

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