Summary B.COM HONS (DU) 1st Semester

Royalty Account
1. MINING ROYALTY
1.1. Royalty Payable
Production:- 10000 ton * Rs20 per ton  Rs200000
1.2. Minimum Rent  Rs100000
Production = 3000 ton
Actual Royalty = 3000 * 20  Rs60000
1.3. Short Working
Minimum Rent = 100000
Less: Actual Royalty = (60000)
Short Working = 40000
1.4. Recoupment of Short Working
Production = 15000 ton
Royalty = 15000 * 20 = 300000
Less: Short working Recoupment = (40000)
240000
DATE PRODUC ROYALTY ROYALTY MIN. SHORT RECO PAYMENT
TION PER TON PAYABLE RENT WORKING UPME
TON NT

2019 4000 10 40000 5000 10000 50000
0
2020 4600 10 48000 5000 2000 50000
0
2021 5800 10 58000 5000 8000 50000
0
2022 8000 10 80000 5000 4000 76000
0
2023 6000 10 60000 5000 60000
0
In the books of Lessee
A. WHEN MINIMUM RENT A/C NOT OPEN.
1. ROYALTY DUE
1.1. When Royalty Amount > Minimum Rent Amount (12000 >
10000)
Royalty A/c Dr. 12000
To Lessor’s A/c 12000
1.2. When Royalty Amount < Minimum Rent Amount (7000 <
10000)
Royalty A/c Dr. 7000
Short working A/c Dr. 3000
To Lessor’s A/c 10000