the unit cost of sales was reduced by 10 in the post incorporation period as compare 618323

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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Sales: 1 January 2010 to 31 March 2010

24,000

1 April 2010 to 31 December 2010

76,000

1,00,000

Cost of Sales

64,000

Administrative Expenses

7,072

Selling Commission

3,500

Goodwill Written off

800

Interest Paid to Vendors (Loan Repaid on 1 May 2010)

1,492

Distribution Expenses (60% Variable)

5,000

Preliminary Expenses Written off

1,320

Debenture Interest

1,280

Depreciation

1,776

Director’s Fees

400

86,640

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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