Shiva started a business on 1 st April 2022 with - 15,00,000 represented by 80,000 units of 25 each. During the financial year ending on 31 st…
CA Intermediate · Advanced Accounting · RTP · May 2024
Shiva started a business on 1 st April 2022 with - 15,00,000 represented by 80,000 units of 25 each. During the financial year ending on 31 st March, 2023, he sold the entire stock for 35 each. In order to maintain the capital intact, calculate the maximum amount, which can be withdrawn by Shiva in the year 2022-23 if Financial Capital is maintained at historical cost.
Suggested Answer and Working Notes:
Financial Capital Maintenance at Historical Cost (₹) Particulars Amount (₹) Closing equity (35x 80,000 units) 28,00,000 Opening equity (80,000 units x 25) 20,00,000 Permissible drawings to keep Capital intact (28,00,000 – 20,00,000) 8,00,000
Topics: Framework for preparation and presentation of financial statements
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