VALUATION OF CINEMA THEATER
CALCULATION FOR DETERMINATION OF FAIR MARKET
VALUE BY PROFIT METHOD
Income
(i) Income from sale of
tickets excluding entertainment tax = Rs. 20,00,000/-
(ii) Income from exhibition
of slides, show cases, soda fountain etc. = Rs. 5,00,000/-
Total Gross Income = Rs. 25,00,000/-
Outgoings
a) Hire charges of film = Rs. 5,00,000/-
b) Hire charges of Incian News Reel = Rs. 10,000/-
c) Salary, bonus P.F. Staff Welfare gratuity = Rs. 2,00,000/-
Insurance collection and management charges = Rs. 2,00,000/-
d) Coveyance charges = Rs. 5,000/-
e) Carbon & Consumable items = Rs. 15,000/-
f) Printing, Stationary postage etc. = Rs. 15,000/-
g) Advertisement & Publicity = Rs. 10,000/-
h) Insurance for building Plat & Machinery =
Rs. 5,000/-
i) Licence Fee = Rs. 1,000/-
j) Service charges for projections, air conditioning plants etc. = Rs.
15,000/-
k) Electricity Bills = Rs. 1,00,000/-
l) Muncipal Taxes = Rs. 50,000/-
m) Repair to building P&M furniture & fixture and sinking
fund = Rs.
50,000/-
n) Enterprencures profit @ 15% on gross income i.e. 25,00,000 = Rs. 3,75,000/-
= Rs. 15,51,000
Solution
(i) Gross income =
Rs. 25,00,000/-
(ii) Total outgoings
= Rs. 15,51,000/-
______________
Net Income = Rs. 9,49,000/-
Tangible
profit 70% of 9,49,000
Intagible
profit 30% of 9,49,000
Capitalise
tangible profit @ 12% Rs. 6,64,300/- X 100/12 = Rs.55,35,833/-
Capitalise
intangible profit @ 14% = Rs. 2,81,700 X 100 / 14 =
Rs. 20,33,571/-
____________
Total
Rs.
75,69,404/-
Say Rs. 75,69,400/-
Prepared by
J.Jaya Ruban,
Land Valuer in Tamilnadu
josephruban33@gmail.com