A company, incorporated on 1st May, 2010 acquired a business as a going concern with effect from 1st January, 2010. The first accounts were drawn up to September 30, 2010. The gross profit is Rs.2,24,000. The general expenses are Rs.56,880, directors remuneration Rs.4,000 p.m.; formation expenses amounted to Rs.6,000, rent which till June 30, 2010 was 400 p.m. was increased to Rs.12,000 per annum from July 1, 2010.
The manager of the earlier firm whose salary was Rs.2,000 p.m. was made as director upon the incorporation and his remuneration thereafter is included in the figure of Directors‘ remuneration given earlier. Prepare Profit and Loss Account for the period and find out the profits available for dividends and the profit prior to incorporation.