Model: Statement method and weighted sales ratio) A company was incorporated on 18 May 2010 to take over a business from the proceeding 1 January. The accounts were made up to 31 December 2010 as usual and the trading and profit and loss account gave the following results:
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Particulars |
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To Opening Stock |
1,00,000 |
By Sales |
12,00,000 |
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To Purchases |
8,00,000 |
By Closing Stock |
1,00,000 |
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To Gross Profit c/d |
4,00,000 |
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13,00,000 |
13,0Q000 |
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To Rent Rates and Insurance |
15,000 |
By Gross Profit b/d |
4,00000 |
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To Director”s Fees |
25,000 |
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To Salaries |
60,000 |
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To Office Expenses |
51,000 |
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To Traveller”s Commission |
16,000 |
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To Discounts |
20,000 |
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To Bad Debts |
4,000 |
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To Audit Fees |
12,000 |
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To Depreciation |
15,000 |
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To Debenture Interest |
9,000 |
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To Net Profit |
1,73,000 |
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4,00,000 |
4,00000 |
It is ascertained that the sales for November and December are one and half times the average of those for the year, whilst those for February and April are only half the average, all the remaining months having average sales. Apportion the year’s profit between pre- and post-incorporation periods.
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