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