you are required to prepare a statement apportioning properly the net profit of the 618291

Model: Statement method. (Time and sales ratios; allocation and actual) Shiva Co. Ltd. was incorporated on 31 July 2009 to acquire the business of Bhagya & Co. as on 1 April 2009. The books of accounts disclosed the following on 31 March 2010:

1. Sales for the year were Rs.24,20,000 (From 1 April 2009 to 31 July 2009 6,05,000; from 1 August 2009 to 31 March 2010 Rs.18,15,000)
2. Gross profit for the year 2009–10: Rs.4,00,000
3. Preliminary expenses written off: Rs.12,000; Managing director’s salary: Rs.20,000; Company secretary’s salary: 60,000
4. Bad debts written off: Rs.12,520 (Prior to 31 July 3,020; after 31 July Rs.9,500)
5. Depreciation: Rs.18,000; General expenses: Rs.42,000; Advertising: Rs.6,000; Interest on debentures: Rs.20,000

You are required to prepare a statement apportioning properly the net profit of the company as between

1. Profits available for distribution
2. Profits prior to incorporation