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.
Answers
Answer:
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.