Balance Sheet of Diamond Ltd. as on 31.3.2011:
|
Liabilities: |
Rs |
|
Share capital: |
|
|
20,000 shares of Rs.10 each |
2,00,000 |
|
General reserve |
40,000 |
|
Profit and loss account |
32,000 |
|
Sundry creditors |
1,28,000 |
|
Income tax reserve |
60,000 |
|
|
4,60,000 |
|
Assets: |
Rs |
|
Land and buildings |
1,10,000 |
|
Plant and machinery |
1,30,000 |
|
Patents and trade marks |
20,000 |
|
Stock |
48,000 |
|
Debtors |
88,000 |
|
Bank balance |
52,000 |
|
Preliminary expenses |
12,000 |
|
|
4,60,000 |
The expert valuer valued the land and buildings at Rs.2,40,000; goodwill at Rs.1,60,000; and plant and machinery at Rs.1,20,000. Out of the total debtors, it is found that debtors of Rs.8,000 are bad. The profits of the company have been as follows:
|
|
Rs |
|
31.3.2009 |
92,000 |
|
31.3.2010 |
88,000 |
|
31.3.2011 |
96,000 |
The company follows the practice of transferring 25% of profits to general reserve. Similar type of companies earn at 10% of the value of their shares. Ascertain the value of shares of the company under:
(i) intrinsic value method;
(ii) yield value method; and
(iii) fair value method.