Describe the method of finding out profit prior and after incorporation
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Profit prior to incorporation is the profit earned or loss suffered during the period before incorporation. ... It is a capital profit and not legally available for distribution as dividend because a company cannot earn a profit before it comes into existence.Thus, any profit/loss made before the incorporation is known as “Profit (Loss) Prior to Incorporation” which is treated as a capital profit and the same cannot be distributed as business profit. ... The same is to be transferred to Capital Reserve or may be adjusted against Goodwill.
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