X Ltd. was incorporated on 1 April 2010 with an authorized capital of 20,000 equity shares of Rs.100 each to take over the running business of Y Ltd. from 1 January 2010. The following is the summarized profit and loss account for the year ended 31 December 2010.
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the unit cost of sales was reduced by 10 in the post incorporation period as compare 618323
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Sales: 1 January 2010 to 31 March 2010 |
24,000 |
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1 April 2010 to 31 December 2010 |
76,000 |
1,00,000 |
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Cost of Sales |
64,000 |
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Administrative Expenses |
7,072 |
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Selling Commission |
3,500 |
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Goodwill Written off |
800 |
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Interest Paid to Vendors (Loan Repaid on 1 May 2010) |
1,492 |
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Distribution Expenses (60% Variable) |
5,000 |
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Preliminary Expenses Written off |
1,320 |
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Debenture Interest |
1,280 |
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Depreciation |
1,776 |
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Director’s Fees |
400 |
86,640 |
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Profit |
13,360 |
The company deals with one type of product. The unit cost of sales was reduced by 10% in the post-incorporation period as compared to the pre-incorporation period. Apportion the net profit between pre-incorporation and post-incorporation periods showing the basis of apportionment.
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