Model: Pre- and post-incorporation profits (statement method) time and sales ratios and allocation Thambu Ltd. was registered on 1 October 2009 to acquire the running business of Shetty & Co. with effect from 1 April 2009. The following was the profit and loss account of the company as on 31 March 2010:
|
Particulars |
Particulars |
||
|
To Office Expenses |
70,000 |
By Gross Profit b/d |
3,00,000 |
|
To Formation Expenses (Written off) |
20,000 |
||
|
To Stationery and Postage … To Selling |
10,000 |
||
|
Expenses |
90,000 |
||
|
To Director”s Fees |
30,000 |
||
|
To Net Profit |
80,000 |
||
|
3,00,000 |
3,00,000 |
You are required to prepare a statement showing profit earned by the company in the pre- and post-incorporation periods. The total sales for the year took place in the ratio of 1:2 before and after incorporation, respectively.