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Ask QuestionPosted by Shivani Pannu 5 years, 1 month ago
- 2 answers
Gaurav Seth 5 years, 1 month ago
According to the Companies Act 2013, there are some laws about the utilization of the Securities Premium Account. It states the specific purposes for which this balance may be used. So the account can only be used for such specific purposes and no other purpose.
To issue fully paid-up bonus shares to its existing shareholders. However, you cannot exceed the limit of the unissued share capital of the company.
Securities premium Account can be used for writing off any preliminary expenses of the company.
To write off expenses of issue of shares and debentures, such as commission paid or discount given on the issue of shares.
The balance can also be used to provide for the premium that is payable on the redemption of debentures or of preference shares of the company.
And finally, it can be utilized by the company to buy back its own shares.
Yogita Ingle 5 years, 1 month ago
The amount of securities premium can be utilised for the following purposes:
1) For writing-off the preliminary expenses of the company.
2) For writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.
3) For paying up the premium payable on redemption of redeemable preference shares or debentures of the company.
Posted by Neha Bansal 5 years, 1 month ago
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Posted by Sejal Mahajan 5 years, 1 month ago
- 1 answers
Yogita Ingle 5 years, 1 month ago
Debentures:
- It is a document known as Debenture Certificate.
- It is an acknowledgement of debt by the company.
- It is an agreement between the company and its debenture holders for repayment of the principal amount on a specified date along with interest at a pre-determined rate charged on the principal amount until the principal is repaid.
- It is an evidence of a debt to the holder usually arising out of a loan and mostly secured by a charge.
Posted by Shalu Gupta 5 years, 1 month ago
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Posted by Vivek Jadhav 5 years, 1 month ago
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Posted by Vivek Jadhav 5 years, 1 month ago
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Gaurav Seth 5 years, 1 month ago
Question
Calculate interest coverage ratio and give your comments:
net profit after tax:120000
rate of income tax:40%
16% debentures Rs 100000
Answer:
Interest Coverage Ratio = Profit before Interest and Tax
Profit after Tax = Rs 1,20,000
Tax Rate = 40%
Value of 60% = Rs 1,20,000
Value of 40% = Rs 1,20,000/60%*40% = Rs 80,000
Profit after Interest but before Tax = Rs 2,00,000 (Rs 1,20,000+Rs 80,000)
Interest on Loan = Rs 15,000 (Rs 1,00,000*15%)
Profit before Interest and Tax = Rs 2,00,000+Rs 15,000 = Rs 2,15,000
Interest Coverage Ratio = Rs 2,15,000/16,000 = 13.4:1.
Posted by Shivam Singh 5 years, 1 month ago
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Posted by Divyakayonzon08 Divyakayonzon08 5 years, 1 month ago
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Dhani Ram 3 years, 3 months ago
Posted by Suraj Verma 5 years, 1 month ago
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Posted by Ishu Tomar 5 years, 1 month ago
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Meghna Thapar 5 years, 1 month ago
A good current ratio is between 1.2 to 2, which means that the business has 2 times more current assets than liabilities to covers its debts. A current ratio below 1 means that the company doesn't have enough liquid assets to cover its short-term liabilities. The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables.
Posted by Rohan Narula 5 years, 1 month ago
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Tr Shanmugam 5 years, 1 month ago
Posted by Anand Singh 5 years, 1 month ago
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Posted by Muskan Soni 5 years, 1 month ago
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Nishu Dahiya 5 years, 1 month ago
Yogita Ingle 5 years, 1 month ago
The economic value of an obligation or debt that is payable by the enterprise to other establishment or individual is referred to liability. To put it in other words, liabilities are the obligations that are rising out of previous transactions, which is payable by the enterprise, through the assets possessed by the enterprise.
Example: Accounts payable, Interest payable, Deferred revenue etc.
Posted by Aman Kaur 5 years, 1 month ago
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Posted by Khushi Rajput 5 years, 1 month ago
- 2 answers
Gaurav Seth 5 years, 1 month ago
Legacy is the amount received by the not-for-profit organisation as per the will of a deceased person. It is non-recurring in nature and, therefore, treated as capital receipt. Hence, legacy cannot be treated as the main source of income for an NPO.
It is not the main source of income for an NPO. It is treated as a capital receipt.
Posted by Khushi Rajput 5 years, 1 month ago
- 1 answers
Gaurav Seth 5 years, 1 month ago
Legacy is the amount received by the not-for-profit organisation as per the will of a deceased person. It is non-recurring in nature and, therefore, treated as capital receipt. Hence, legacy cannot be treated as the main source of income for an NPO.
It is not the main source of income for an NPO. It is treated as a capital receipt.
Posted by Sourav Mal 5 years, 1 month ago
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Posted by Shekhar Singh 5 years, 1 month ago
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Riya Choudhary 5 years, 1 month ago
Posted by Avantika Deshpande 5 years, 2 months ago
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Riya Choudhary 5 years, 1 month ago
Yogita Ingle 5 years, 2 months ago
Executor's account is prepared in case of death of a partner.The closing balance of deceased (dead) partner's capital account is credited to his executors account. It is basically prepared to tranfer the closing balance of deceased partner.(just as we prepare retiring partner's loan account in case of retirement)
Posted by Dolly Pal 5 years, 2 months ago
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Posted by Krish Kumar 5 years, 2 months ago
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Riya Choudhary 5 years, 1 month ago
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Gaurav Seth 5 years, 1 month ago
Forfeited shares can be reissued as fully paid at a par, premium or discount. In this, it may be noted that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares at the time of initial issue.
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