Model: Net assets method The Following is the Balance Sheet of Raj Ltd. as on 31 March 2010: The Following is the Balance Sheet of Raj Ltd. as on 31 March 2010: Liabilities:
|
1,00,000 Equity Shares ofl 10 Each, Fully Paid |
10,00,000 |
|
1,00,000 Equity Shares ofl 10 Each, 5 Paid Up |
5,00,000 |
|
80,000 14% Cumulative Pref. Shares ofl 10 Each, Fully Paid |
8,00,000 |
|
Long-Term Secured Loan |
12,00,000 |
|
Sundry Creditors |
3,00,000 |
|
38,00,000 |
|
|
Assets: |
|
|
Land & Buildings |
20,00,000 |
|
Furniture, Fixtures & Fittings |
1,00,000 |
|
Stock |
5,00,000 |
|
Debtors |
3,00,000 |
|
Cash at Bank |
1,00,000 |
|
P&L A/c |
8,00,000 |
|
38,00,000 |
The current value of land and buildings is Rs.27,00,000 and that of furniture, fixture and fittings is Rs.60,000. Stock is valued at Rs.7,00,000. Debtors are expected to realize only 80% of their book value. You are informed that the preference dividend has not been paid for the last 5 years. Calculate the intrinsic value of equity share by the net assets method.