Jasemine Company Ltd. was formed to take over a running business with effect from 1 April 2009. The company was incorporated on 1 August 2009, and the Certificate of Commencement of Business was received on 1 October 2009. The following profit and loss account has been prepared for the year ended 31 March 2010.
Profit and Loss Account for the Year Ended 31 March 2010
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Particulars |
Particulars |
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|
To Salaries |
1,20,000 |
By Gross Profit |
8,00,000 |
|
To Printing and |
12,000 |
b/f |
|
|
Stationery |
42,000 |
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|
To Travelling |
40,000 |
||
|
Expenses |
94,500 |
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|
To Advertisement |
66,000 |
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To Miscellaneous Trade Expense To |
10,500 |
||
|
Rent (Office Building) |
28,000 |
||
|
To Electricity |
8,000 |
||
|
Charges |
40,000 |
||
|
To Director”s Fees To Bad Debts |
15,000 7,500 |
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|
To Commission: Selling Agents To |
|||
|
Audit Fees To Debenture Interest |
10,500 |
||
|
To Interest Paid |
63,000 |
||
|
to Vendors |
24,000 |
||
|
To Selling Expenses |
2,19,000 |
||
|
To Depreciation on Fixed Assets To |
8,00,000 |
8,00,000 |
|
|
Net Profit c/f |
Additional information:
- Total sales for the year, which amounted to Rs.48,00,000 arose evenly up to the date of the Certificate of Commencement of Business, where after they spurted to record an increase of two-thirds during the rest of the year.
- Rent of office building was paid @ Rs.5,000 per month up to September 2009 and thereafter it was increased by Rs.1,000 per month.
- Travelling expenses include Rs.12,000 towards sales promotion.
- Depreciation includes Rs.1,500 for assets acquired in the post-incorporation period.
- Consideration was discharged by the company on 30 September 2009, by issuing equity shares of Rs.10 each.
You are required to prepare the profit and loss account in columnar form showing distinctly the allocation of profits between pre-incorporation and post- incorporation periods, indicating the basis of allocation regarding each item.