The junior Accounts Officer of Ananda Sea Foods Ltd. calculated the net profits for the managing directors
Question:
The junior Accounts Officer of Ananda Sea Foods Ltd. calculated the net profits for the managing director’s commission as ₹ 14.50 crore. Later he has realized that he has not considered the following.
Subsidy received from central government ₹ 1.20 crore.
Profits on sales by the company of forfeited shares amounted to ₹ 0.63 crore
Compensation or damages to be paid by legal liability, arising from a breach of contract with Jagadish Marines amounted to ₹ 0.70 crore
Mavullamma Human Capitals have brought workers from other states as Ananda Sea Foods promised job openings. However, due to unseen market conditions, no recruitment could be done. Compensation of ₹ 12 lakh was voluntarily paid to Mavullamma Human Capitals by Ananda Sea Foods Ltd.
Calculate the correct net profit for the calculation of managerial remuneration.
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg