Page 276 - Corporate Finance PDF Final new link

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276 Corporate Finance BRILLIANT’S

2. At the end of the year, profit/loss on sale of investment
is transferred to Profit and Loss Account/Statement of
Profit and Loss
df© H$s g‘m{á na {Zdoe Ho$ {dH«$¶ na bm^/hm{Z H$mo bm^ VWm hm{Z
ImVo/bm^ VWm hm{Z Ho$ ñQ>oQ>‘|Q> ‘| ñWmZm§V[aV {H$¶m OmVm h¡&
If there is a profit on sale of investment
¶{X {Zdoe Ho$ {dH«$¶ na bm^ hmoVm h¡&

Investment Account Dr.
To Profit & Loss Account / Statement of Profit & Loss
If there is a loss on sale of investment
¶{X {Zdoe Ho$ {dH«$¶ na hm{Z hmoVr h¡&
Profit & Loss Account/Statement of Profit & Loss Dr.
To Investment Account

It should be noted that any brokerage on sale of investment paid should be deducted
from sale proceeds to get net sale proceeds. / ¶h XoIm OmZm Mm{hE {H$ ^wJVmZ {H$¶o J¶o {Zdoe Ho$
{dH«$¶ na H$moB© ~«moH$aoO Hw$b {dH«$¶ H$m¶©dmhr àmá H$aZo Ho$ {bE {dH«$¶ H$m¶©dmhr go KQ>m¶r OmZr Mm{hE&

Illustration 3.3.3
On 1st April, 2017 Lotus Ltd had ` 3,00,000 6% Government Stock at ` 94 each (face value
` 100). Interest is payable half-yearly on 31st March and 30th September. The company sold
` 90,000 of the stock at ` 95 cum-interest on 1st June, 2017. Draw up 6% Government Stock Account
in the investment Ledger of the company for the year ended 31st March, 2018. Ignore brokerage and
income tax. The stock was quoted at ` 96 ex-interest at the stock exchange on that date.
1 Aà¡b 2017 H$mo bmoQ>g {b{‘Q>oS> Zo < 94 (’¡$g d¡ë¶y < 100) à˶oH$ na < 3,00,000 6% JdZ©‘|Q> ñQ>m°H$
IarXm& ã¶mO 31 ‘mM© VWm 30 {gV§~a H$mo AY©dm{f©H$ ^wJVmZ {H$¶m OmVm h¡& H§$nZr Zo 1 OyZ, 2017 H$mo < 95 H$‘-
B§Q>aoñQ> na < 90,000 H$m ñQ>m°H$ ~oMm& 31 ‘mM© 2018 H$mo g‘má hþE df© Ho$ {bE H§$nZr Ho$ B§doñQ>‘|Q> boOa ‘| 6%
JdZ©‘|Q> ñQ>m°H$ AH$mC§Q> {ZH$m{bE& ~«moH$aoO VWm B§H$‘ Q>¡³g H$s AdhobZm H$s{OE& ñQ>m°H$ Cg {XZm§H$ na ñQ>m°H$ E³gM|O
na < 96 E³g-B§Q>aoñQ> na H$moQ> {H$¶m J¶m Wm&
Solution: In the Books of Lotus Ltd.
6% Government Stock Account
Dr. [Interest Payable: 30th June & 31st December] Cr.

Date Particulars Nominal Inter- Cost Date Particulars Nominal Inter- Cost
Value est (`) (`) Value est (`) (`)
1.4.17 To Bala. b/d 3,00,000 - 2,82,000 1.6.17 By Bank A/c 90,000 900 84,600
31.3.18 To State- 30.9.17 By Bank A/c - 6,300 -
ment of P&L - 13,500 - 31.3.18 By Bank A/c - 6,300 -
31.3.18 By Bal. c/d 2,10,000 - 1,97,400
3,00,000 13,500 2,82,000 3,00,000 13,500 2,82,000