Example: A coal company leased a land
for a minimum rent of Rs. 900 for 1st year, Rs.1, 200 for 2nd
year, Rs. 1, 800 for 3rd year, Rs. 2, 500 and Rs. 3, 000 for 5th
year. The royalty at the rate is Rs. 0.60 per ton of output. The company leased
a land for 15 years. The output of 6 years is given below:
Years
|
Output per ton
|
1
|
1, 200
|
2
|
1,
800
|
3
|
2, 600
|
4
|
4,
900
|
5
|
5, 700
|
Find out the
short working and surplus with the help of royalty table. The short working
recouped whole year of lease.
Solution:
Years
|
Output per ton
|
Royalty @ Rs. 0.60 per ton of
output
|
Minimum rent
|
Short working
|
1
|
1, 200
|
720
|
900
|
180
|
2
|
1, 800
|
1, 080
|
1, 200
|
120
|
3
|
2, 600
|
1, 560
|
1, 800
|
240
|
4
|
4, 900
|
2, 940
|
2, 500
|
----
|
5
|
5, 700
|
3, 420
|
3, 000
|
----
|
Surplus
|
Short working recouped
|
Un-recouped short working
transferred to profit and loss a/c
|
Payment to landlord
|
----
|
-----
|
-----
|
900
|
----
|
-----
|
-----
|
1, 200
|
----
|
-----
|
-----
|
1, 800
|
440
|
440
|
-----
|
2, 500
|
420
|
100
|
-----
|
3, 320
|
Example: A coal mine company took a
land on lease for 25 years on minimum rent of Rs. 12, 000 per year. The royalty
is Rs. 3 per ton of output. The royalty is due on 31st march but
payment made on 31st December. The financial year started from 1st
April 2006 and ended on 31st March 2006. The short working of royalty
is recouped after first four years of commencement of productions. The leased
period started from 1st June 2006 and the outputs of four years are
as follows:
Years
|
Output per ton
|
1
|
3, 200
|
2
|
4, 800
|
3
|
2, 600
|
4
|
4, 100
|
The minimum
rent is Rs.10, 000 per year.
Solution:
Years
|
Output per ton
|
Royalty @ Rs. 3 per ton of
output
|
Minimum rent
|
Short working
|
2006
|
3, 200
|
9, 600
|
10, 000
|
400
|
2007
|
4, 800
|
14, 400
|
10, 000
|
----
|
2008
|
2, 600
|
7, 800
|
10, 000
|
2, 200
|
2009
|
4, 100
|
12, 300
|
10, 000
|
----
|
Surplus
|
Short working recouped
|
Un-recouped short working
transferred to profit and loss a/c
|
Payment to landlord
|
----
|
-----
|
-----
|
10, 000
|
4, 400
|
400
|
-----
|
14, 000
|
----
|
-----
|
-----
|
10, 000
|
2, 300
|
2, 200
|
-----
|
10, 100
|
Example: ABC Mine Company took an 800
arc land on lease for 10 years from Mr. X. Under the lease agreement the
royalty paid @ of Rs. 4 per ton and the minimum rent is Rs. 12, 000 per
year. It is also mentioned in the
agreement that the royalty paid on half yearly basis. Find out the short working
of royalty and surplus of royalty. The excess of minimum rent over royalty is recouped
by surplus of royalty (excess of royalty over minimum rent). The short workings
of royalty are recouped only in first 3 half yearly years. The output is as
follows:
Years
|
Output per ton
|
June 2009
|
3,000
|
Dec 2009
|
4, 500
|
June 2010
|
2, 500
|
Dec 2010
|
5, 100
|
June 2011
|
8, 000
|
Dec 2011
|
10, 000
|
Solution:
Years
|
Output per ton
|
Royalty @ Rs. 4 per ton of
output
|
Minimum rent
|
Short working
|
June 2009
|
2,800
|
11, 200
|
12, 000
|
800
|
Dec 2009
|
4, 500
|
18, 000
|
12, 000
|
----
|
June 2010
|
2, 500
|
10, 000
|
12, 000
|
2, 000
|
Dec 2010
|
5, 100
|
20, 400
|
12, 000
|
----
|
June 2011
|
8, 000
|
32, 000
|
12, 000
|
----
|
Dec 2011
|
10, 000
|
40, 000
|
12, 000
|
----
|
Surplus
|
Short working recouped
|
Un-recouped short working
transferred to profit and loss a/c
|
Payment to landlord
|
----
|
-----
|
-----
|
12, 000
|
6, 000
|
800
|
-----
|
17, 200
|
----
|
----
|
2, 000
|
12, 000
|
8, 400
|
-----
|
20, 400
|
|
20, 000
|
-----
|
-----
|
32, 000
|
28, 000
|
2, 200
|
-----
|
40, 000
|
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