The following is the draft Profit & Loss A/c of Anjali Ltd. for the year ended 31st March, 2018: Particulars ₹ Particulars ₹ To Administrative and marketing expenditure 7,60,600 By Balance b/d 5,70,500 To Directors f

CS Executive · Company Accounts & Auditing Practices · PYQS · June 2019
The following is the draft Profit & Loss A/c of Anjali Ltd. for the year ended 31st March, 2018: Particulars ₹ Particulars ₹ To Administrative and marketing expenditure 7,60,600 By Balance b/d 5,70,500 To Directors fees 1,11,000 By Gross profit for the year 35,55,700 To Interest on debentures 52,500 By Revenue grants received from Govt. 3,10,000 To Depreciation on fixed assets 4,75,650 To Managerial Remuneration 2,22,350 To Provision for taxation 9,90,900 To General Reserve 3,00,000 To Proposed Dividend 7,50,000 To Balance c/d 7,73,200 Total 44,36,200 Total 44,36,200 Depreciation on Fixed assets as per Schedule II of the Companies Act, 2013 was ₹5,10,600. You are required to calculate the maximum managerial remuneration payable as per the Companies Act, 2013.

Answer & Explanation:

Calculation of Net Profit under section 198 of the Companies Act, 2013 Particulars Amount (₹) Amount (₹) Gross Profit 35,55,700 Add: Revenue Grants from Government 3,10,000 38,65,700 Less: Administrative and Marketing Expenses (7,60,600) Director Fees (1,11,000) Interest on Debentures (52,500) Depreciation on Fixed Assets as per Schedule II (5,10,600) (14,34,700) Profit u/s 198 24,31,000 Maximum Managerial Remuneration under Companies Act, 2013 = 11% of ₹24,31,000 = ₹2,67,410.

Topics: Managerial Remuneration

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