Scribd
Upload
745 views2 pages

M/s Alag Pre Post Solution

The firm M/s. Alag was carrying on business from July 1, 2017 and incorporated as a company on November 1, 2017. The first accounts were prepared until March 31, 2018. The gross profit for the period was Rs. 56,000. Expenses included general expenses of Rs. 14,220, director's fees of Rs. 12,000, and incorporation expenses of Rs. 1,500. Rent was Rs. 1,200 until December 31, 2017 and then increased to Rs. 3,000. The manager's salary of Rs. 6,000 was included in director's fees after incorporation. The net sales were Rs. 8,20,000 and the monthly average for the first four months

Uploaded by

Ayush Verma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
745 views2 pages

M/s Alag Pre Post Solution

The firm M/s. Alag was carrying on business from July 1, 2017 and incorporated as a company on November 1, 2017. The first accounts were prepared until March 31, 2018. The gross profit for the period was Rs. 56,000. Expenses included general expenses of Rs. 14,220, director's fees of Rs. 12,000, and incorporation expenses of Rs. 1,500. Rent was Rs. 1,200 until December 31, 2017 and then increased to Rs. 3,000. The manager's salary of Rs. 6,000 was included in director's fees after incorporation. The net sales were Rs. 8,20,000 and the monthly average for the first four months

Uploaded by

Ayush Verma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

ILLUSTRATION 14

was carrying on business


from 1st July, 2017 gets itself incorporated as
A firm M/s. Alag. which
on Ist November, 2017. The first accounts are drawn upto March 31, 2018. The gross
a company
is56,000. The general expenses are 7 14,220; Director's fees 7 12,000 p.a.:
profit for the period
31st December was 1,200 p.a., after which it is increased
incorporation expenses 1,500. Rent upto
who upon incorporation of the company was made a director,
to 3,000 p.a. Salary of the manager,
above figure of fees to the directors. Give
is 6,000 p.a. His remuneration thereafter is included in the The net sales are 8,20,000,
Profit and Loss Statement showing pre and post incorporation profit. that of the remaining period. The
the monthly average of which for the first four months is one-half of
company earned a uniform profit. Interest and tax may be ignored.
SOLUTION

PROFIT& LOSS STATEMENT FOR 9 MONTHS ENDED ON 31ST MARCH, 2018

Particulars Ratio Pre Post-


Incorporation Incorporation
Gross Profit 2:5 16,000 40,000
I. Expenses:
7.36 Tulsian's Accountancy for CA Intermediate Course (Group 1)
wwwwwwwwww
wwwwwwwwwwwwwwwwwwwwwwwwwwwwwwww.wn vewmARNermnamwn wNHwwwwerwn

2,000
Employee Benefits Expense 6,720
Other Expenses 8,720
15,350
Total Expenses 7,280
15350
24 850
. Profit for the period
capital nature and hence will
be treated asbe
Note: Profit for the Pre-Incorporation period will be treated as O rafion period will be treated a

Post-Incorporation po
Capital Reserve Account biut Profit for the
Credited to
revenue nature hence will remain in the Profit & Loss Statement
*APPORIONMENT OF EXPENSES

Ratio Pre Post


Particulars Incorporation
Incorporation
6,320
General Expenses
4:5
7,900
Directors' Fees 5,000
Formation Expenses
400
1,500
Rent W.N.(i) 950
6,720
15,350

Working Notes:
(i) Calculation of ales Ratio
Let the Average Monthly Sales of first four months = 100 and next five months =200
Total Sales of first four months = 100 x 4 = 400 and total sales of next five months
= 200 x 5 = 1,000
The Ratio of Sales z 400 1,000 2:5
(ii) Rent
Till 31st December, 2017, Rent was 1,200 p.a. i.e. 7 100 p.m.
So, Pre-incorporation Rent 7 100 x 4 months = 400
Post-incorporation Rent = ( 100 x 2 months) + ( 250 x 3 months) = 7 950

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy