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Is this Solution Okay in ICAI module ?

CA Final 740 views 1 replies

I was doing Questions from Valuation of goodwill CHapter given in ICAI Module. Plz check it out for errors. The Question is- Example 2 on page 9.62.

The balance sheet of Mcniel Ltd consists of Rs. 6000 Thousand 50% Convertible Debenture( Convertible on very next day of Balance sheet Date)

While computing Future Maintainable Profits, the Interest on Rs. 3000 Thousand( 6000*50%) debentures is not deducted from profits of each year 2002 to 2006.

According to me, it should be charged against profits to the extent of 3000*13% since these amount of debentures will still be there after conversion bcoz conversion is only to  the extent of 50%.

Plz correct me if i am wrong ?

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