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Royalty AccountsPenelopment Or Shortworkings:Problem 2:(When there is fixed recoupment of short workings and short workingswritten off)A company leased a colliery on 1.1.2007 at a minimum rent of Rs. 40,000per year merging into a royalty of Rs. 3 per unit with power to recoupshortworkings over the first three years of the lease. The output of the colliery forthe first four years was 9000 units, 12,000 units, 16,000 units and 20,000 unitsrespectively. Give journal entries in the books of lessee and lessor.Answer:Analytical tableYear Output RoyaltyRs.Minimum Short Surplus Recoup WrittenRent (Rs.) workingsment off13,0004,0002007 9,000 27,0002008 12,000 36,0002009 16,000 48,0002010 20,000 60,00040,00040,00040,00040,0008,000 8,000 9,00020,000 |
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