The following information is given for Mr. Atwood for the year ended 31.03.2025: 01.04.2024 Mr. Atwood has 3,000 equity shares in Sun Limited at a…

In the books of Atwood Investment in Equity Shares of Sun Ltd. Account Date Particulars No. Dividend Amount Date Particulars No. Dividend Amount (₹) (₹) (₹) (₹) 1.04.24 To Balance b/d 3,000 3,30,000 2.10.24 By Bank A/c (W.N. 5) 30,000 15,000 1.07.24 To Bank A/c 1,500 1,38,600 1.1.25 By Bank A/c 1,000 1,15,000 15.10.24 To Bonus Issue 1,800 31.3.25 By Balance c/d (W.N.7) 5,300 3,81,600 1.01.25 To Profit & Loss A/c (W.N. 6) 43,000 31.3.25 To Profit & Loss A/c 30,000 6,300 30,000 5,11,600 6,300 30,000 5,11,600 9% Bonds Account [Interest Payable: 1 st September & 1 st March] Date Particulars Nominal Value (₹) Interest (₹) Cost (₹) Date Particulars Nominal Value (₹) Interest (₹) Cost (₹) 1.8.24 To Bank A/c (W.N.1) 5,00,000 18,750 4,66,250 1.9.24 By Bank A/c (5,00,000 x 9% x 6/12) 22,500 31.3.25 To Profit & Loss A/c (W.N 3) 23,000 1.3.25 By Bank A/c 22,500 31.3.25 By Bank A/c (W.N 2) 4,00,000 3,000 3,96,000 31.3.25 To Profit & Loss A/c 30,000 31.3.25 By Balance c/d (W.N.4) 1,00,000 750 93,250 5,00,000 48,750 4,89,250 5,00,000 48,750 4,89,250 Working Notes: 1. Cost of Bond purchased on 1 st August, 2024 5,000, 9% bonds were purchased @97 cum-interest. Total amount paid 5,000 bonds x 97 = 4,85,000 which includes accrued interest for 5 months, i.e., 1 st March, 2024 to 31 st July, 2024. Accrued interest will be - 5,00,000 x 9/100 x 5/12 = 18,750. Therefore, cost of Bond purchased = 4,85,000 – 18,750 = 4,66,250. 2. Sale of bonds on 31 st March, 2025 4,000 bonds were sold@99 ex-interest, i.e., Total amount received = 4,000 x 99 + accrued interest for 1 month = 3,96,000 +3,000 (4,00,000 x 9/100 x 1/12) 3. Profit on sale of bonds Particulars ₹ Sale value 3,96,000 Cost of 4,00,000 9% bonds = 4,66,250/5,000x 4,000 3,73,000 Profit 23,000 4. Value of bonds on 31.3.2025 Lower of: Cost of bonds on 31.3.2025 will be - 4,66,250/ 5,000 x 1,000 = 93,250. Market Value on 31.3.2025 will be - 1,000 X 98 = 98,000 Value of bonds on 31.3.2025 = 93,250 Interest accrued on bonds on 31.3.2025 = 1,00,000 x 9% x 1/12 = 750 5. Dividend on equity shares for 2023-24 Post acquisition dividend = 3,00,000 x 10% = 30,000 transferred to Profit & Loss account Pre-acquisition dividend = 1,50,000 X 10% = 15,000 credited to investment A/c 6. Profit on sale of equity shares Particulars ₹ Sale value 1,15,000 Cost of shares = 4,53,600 / 6,300 x 1,000 72,000 Profit 43,000 (Average cost method being followed) 7. Value of equity shares at end of year Lower of: Cost of shares on 31.3.2025 will be - 4,53,600 / 6,300 x 5,300 = 3,81,600 Market Value on 31.3.2025 will be 5,300 x 125 = 6,62,500 Value of shares = 3,81,600