Question

Q.1 Kunika Ltd. was registered on 1st July, 2019 to buy over the running business of Mr. R.D. as from 1st April 2019 and obtained the Trading Certificate on 1st August 2019. The accounts of the company for the period ended 31st March 2020 disclosed the following facts:

1. The turnover for the whole period Rs. 7,20,000 of which Rs. 90,000 related to the period from 1st April, 2019 to 1st July 2019 and Gross Profit Rs. 2,88,000.

2. The following items appeared in the Profit and Loss Account

Particulars Amount

Managing Director’s Remuneration 4,500

Audit Fees 2,250

Rent Paid 14,400

Bad debts (of which Rs. 2,400 related to the book debts created before 1st August 2019) 6,000

Staff Salaries 36,000

Interest on Debentures 18,000

Depreciation on Furniture 10,800

Brokerage 3,600

Discount on Issue of Debentures 3,600

General Expenses 5,400

Commission on Sales 10,800

Printing & Stationery 7,200

Travelling Expenses 25,200

Advertisement and free sample 12,600

Interest to vendor ( at 6% on 3,00,000 from 1st April 2019 to 30th September 2019) 12,000

Prepare statement slowing Profit Prior to incorporation. State the amount of profit available for distribution of dividend.

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Answer 1

Answer:

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