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M.354 An Aid to Accountancy—CBSE XII

Working Notes:
1. Calculation of Net Profit before Tax and Extraordinary Items:
Particulars `
Profit for the Year (` 6,00,000 – ` 3,00,000) 3,00,000
Add: Interim Dividend Paid 1,00,000
Dividend Paid (Proposed Dividend for 2016–17) 1,50,000
Provision for Tax 2,00,000
Net Profit before Tax and Extraordinary Items 7,50,000

2. Interest on Debentures = (` 6,00,000 × 12/100 × 4/12) + (` 8,00,000 × 12/100 × 8/12)
= ` 24,000 + ` 64,000 = ` 88,000.

3. Dr. MACHINERY ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 15,00,000 By Bank A/c—Sale 10,000
To Bank A/c—Balancing Figure 6,00,000 By Loss on Sale of Machinery A/c 20,000
(Purchase) (Statement of Profit and Loss)
By Depreciation A/c 1,70,000
By Balance c/d 19,00,000
21,00,000 21,00,000

4. It is assumed that Proposed Dividend for the year 2016–17 had been approved by shareholders and paid.