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diamond coal companies. took a mine on lease on a royalty of 40paise per tonne of coal raised with a dead rent of ₹30000 per year and power tobrecoup s. w during the first five years of the lease. the out put are 10000,48000,80000,120000,120000
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diamond coal companies. took a mine on lease on a royalty of 40paise p...
Royalty Accounts in Coal Industry

Royalty accounts refer to the accounting for payments made by mining companies to the government for the extraction of minerals from government-owned land. In this case, Diamond Coal Companies have taken a mine on lease from the government and are required to pay a royalty of 40 paise per tonne of coal raised.

Calculation of Royalty and Dead Rent

The royalty and dead rent payment for the five years of the lease can be calculated as follows:

Year 1:
- Output: 10,000 tonnes
- Royalty payment: 10,000 tonnes x 0.40 paise/tonne = ₹4,000
- Dead rent payment: ₹30,000

Year 2:
- Output: 48,000 tonnes
- Royalty payment: 48,000 tonnes x 0.40 paise/tonne = ₹19,200
- Dead rent payment: ₹30,000

Year 3:
- Output: 80,000 tonnes
- Royalty payment: 80,000 tonnes x 0.40 paise/tonne = ₹32,000
- Dead rent payment: ₹30,000

Year 4:
- Output: 120,000 tonnes
- Royalty payment: 120,000 tonnes x 0.40 paise/tonne = ₹48,000
- Dead rent payment: ₹30,000

Year 5:
- Output: 120,000 tonnes
- Royalty payment: 120,000 tonnes x 0.40 paise/tonne = ₹48,000
- Dead rent payment: ₹30,000

Calculation of Power to Recoup S.W.

The Power to Recoup S.W. refers to the amount of coal output required to cover the dead rent payment in a given year. The calculation for each year is as follows:

Year 1: Power to Recoup S.W. = ₹30,000 ÷ 0.40 paise/tonne = 7,500 tonnes
Year 2: Power to Recoup S.W. = ₹30,000 ÷ 0.40 paise/tonne = 7,500 tonnes
Year 3: Power to Recoup S.W. = ₹30,000 ÷ 0.40 paise/tonne = 7,500 tonnes
Year 4: Power to Recoup S.W. = ₹30,000 ÷ 0.40 paise/tonne = 7,500 tonnes
Year 5: Power to Recoup S.W. = ₹30,000 ÷ 0.40 paise/tonne = 7,500 tonnes

Conclusion

In conclusion, Diamond Coal Companies have to pay a royalty of 40 paise per tonne of coal raised and a dead rent of ₹30,000 per year. Additionally, they need to produce a certain amount of coal to recoup their dead rent payment each year. These payments and calculations are crucial to the accounting of mining companies in the coal industry.
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diamond coal companies. took a mine on lease on a royalty of 40paise per tonne of coal raised with a dead rent of ₹30000 per year and power tobrecoup s. w during the first five years of the lease. the out put are 10000,48000,80000,120000,120000 Related: Royalty Accounts - Commerce
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