Page 283 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes Show Profit and Loss Account assuming that the net sales were 8,20,000, the monthly
average of which for the first four months of 2010 being one-half of that of the remaining
period, the company earned a uniform profit. Interest and Taxation maybe ignored:
(B.Com. Rohilkhand 1992)
Ans: Pre-incorporation profit 7,280
Post-incorporation profit 24,650.

3. Bhaba Limited was incorporated on 30 June, 2010 to take over the business of R. Kumar
th
as from 1 January 2010. The financial accounts of the business for the year ended. 31.12.2010
st
disclosed the following information:
Particulars
Sales – January to June 1,20,000
July to December 1,80,000 3,00,000
Less: Purchases–
January to June 75,000
July to December 1,20,000 1,95,000
Gross Profit 1,05,000
Less: Salaries 15,000
Selling Expenses 3,000
Depreciation 1,500
Director’s Remuneration 750
Debenture Interest 90
Administrative Exps. (Rent, Rates, etc.) 4,500 24,840
Profit for the year 80,160

You are required to prepare a statement apportioning the balances between periods prior
to and since incorporation and show the Profit & Loss Appropriation Account for the year
st
ended 31 December, 2010.
[Adapted from I.C.W.A. (Final) June, 1981]
Ans: Pre-incorporation profit 33,300
Post-incorporation profit 46,860.
D. Calculation of Sales Ratio

4. Mittal Rolling Mills Limited was registered on 1 April, 2010 to take over the business of
st
st
Mittal Brothers from 1 January, 2010 From the following information given to you. You
are required to calculate the profit earned by the company in pre- and post-incorporation
periods.
(a) Sales during the period January-December 2010 4,80,000. The trend of the sales was
as under:
January and February : Half the average sales in each month.

May, June, July : Average sales in each month.
October : Average sales.
November & December : Half the average sales in each month.
(b) Cost of goods sold 1,20,000

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