Model: Time ratio, adjusted time ratio, weighted sales ratio and preparation of statement Kapur Ltd. was incorporated on 1 May 2009 to take over the running business of Sunil & Bros. with effect from 1 January 2009. From the following details for the year ended 31 December 2009, you are required to prepare a statement showing profit or loss made during the pre- and post-incorporation periods:
|
(i) |
Gross Profit |
5,00,000 |
|
(ii) |
Salaries |
90,000 |
|
(iii) |
Advertising |
9,000 |
|
(iv) |
Commission to Partners |
12,000 |
|
(v) |
Carriage Outward |
15,000 |
|
(vi) |
Depreciation |
21,000 |
|
(vii) |
Provision for Doubtful Debts |
6,000 |
|
(viii) |
Undertaking Commission |
30,000 |
|
(ix) |
Insurance Premium paid for the year ending 31 March 2010 |
18,000 |
|
(x) |
Interest on Loan taken (Including Rs.6,000 on Loan taken after Incorporation) |
24,000 |
Additional data:
- Average monthly sales during the first 4 months of the year were twice the average monthly sales during each of the remaining 8 months.
- 30% of the underwriting commission is to be written off
- Commission to partners was paid for their work before incorporation
- Salaries include salary paid to a director of a company Rs.12,000.