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 ?
CAclubindia
