Using the same data, what is the total statutory reserve to be deducted from the net surplus before computation of interest on share capital holdings?

Using the same data, what is the total statutory reserve to be deducted from the net surplus before computation of interest on share capital holdings?

• A. P81,000
• B. P35,100
• C. P54,000
• D. P72,900

Answer: (A)

Statutory reserves are the funds the law requires a company to set aside from its net surplus before computing any interest on share capital holdings. To determine the amount to deduct, add up all the mandated reserve components shown in the data—the total of those reserves is the amount you subtract from net surplus before calculating IOSCH. In this problem, those reserve components sum to 81,000, so 81,000 is the total statutory reserve to deduct. This aligns with the rule that the available base for calculating interest on share capital holdings must exclude all required reserves, ensuring the calculation reflects only the distributable surplus.

Statutory reserves are the funds the law requires a company to set aside from its net surplus before computing any interest on share capital holdings. To determine the amount to deduct, add up all the mandated reserve components shown in the data—the total of those reserves is the amount you subtract from net surplus before calculating IOSCH. In this problem, those reserve components sum to 81,000, so 81,000 is the total statutory reserve to deduct. This aligns with the rule that the available base for calculating interest on share capital holdings must exclude all required reserves, ensuring the calculation reflects only the distributable surplus.