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Questions and Answers
How many equity shares were issued by K Ltd?
What is the total advance payment of tax for the year ended 31st March 2017?
What was the determination of tax liability upon the completion of assessment on November 15, 2017?
What was the gross profit reported for the period ending September 30, 2017?
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What is the commission rate assumed for the underwriting in K Ltd's share issue?
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Study Notes
Equity Share Issue and Underwriting
- K Ltd issued 100,000 equity shares at par value of Rs. 10 each
- A, B, and C underwrote the entire issue with allocations of 60,000, 30,000, and 10,000 shares respectively
- Underwriters also applied for additional shares (A - 8,000, B - 10,000, C - 2,000)
- The company received applications for 80,000 shares (A - 20,000, B - 14,000, C - 6,000)
- A 2.5% commission rate is applied for underwriters' liability
Income Tax Provision - 31st March 2017
- Income tax provision for the year ended 31st March 2017 was ₹50,00,000
- Advance tax payment was ₹45,00,000
- TDS on income earned was ₹46,000
- Tax liability was determined at ₹58,40,000 after assessment on 15th November 2017
Income Tax Provision and Company Incorporation - 31st March 2018
- Advance tax payment for the year ending 31st March 2018 was ₹62,00,000
- Provision for taxation was ₹70,00,000
- The firm operated as a sole proprietorship until January 1, 2017
- The firm incorporated as a company on May 1, 2017
- Financial statements were prepared up to September 30, 2017
- Gross profit for the period was ₹56,000
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Description
This quiz covers the concepts of equity share issuance and underwriting, including calculations related to underwriters' liabilities and commission rates. Additionally, it explores income tax provisions relevant to financial year assessments for a business. Test your knowledge on these important finance topics!
