Originally posted by : Kaushik Vankadkar
	Pre and Post acquisition time ratio: Jan to April = 4months and May to Sep = 5months therefore ratio = 4:5. Now, Net profit after director's fees = Rs.200000 Add: Director's fees = Rs. 34000 (As it is purely post acquistion) Net profit = Rs.234000 Divide the net profit of Rs. 234000 in the time ratio = 4:5 Therfore, Pre profits = Rs.234000/9*4 = 104000 Post profits = Rs.234000/9*5 = 130000 Post profit before director rem = 130000 Less: director remuneration = 34000 NET PROFIT C/F TO P/L = 96000 and Rs.104000/- carried to capital reserves.

 GOOD WORKINGS ALSO BROTHER........

Originally posted by : Faiz Ahmed
	Originally posted by : R Nelson Ram i dont agree with the above solutions  .... the sale has not been uniform throughout the nine months ... so profit will not be uniform for the 9 months .... the sale p.m for the first 6 months is half of the sale p.m of the remaining 3 months ...profit is higher in the last 4 months... g.p will be distributed on the basis of ratio of sales . moreover it is compulsory for public limited company to obtain certificate of commencement ... so the post incorporation period will be for 4 months..... ratio of sales of pre:post will be 1/2*5:1/2+(1*3) i.e 5:7 gp for post incorporation period will be 450000*7/12=262500 post incorporp. profit = 262500 - 34000 - {(216000/9)*4} = 142500 ....   First  regarding ur certificate of commence. business doubt.... A co. comes into existence on the date of incorporation and not on the date certificate of commencing business is recd. In this case after incorporation exp. like director fees is incurred which is possible that it might hv been charged b4 CCBusines is recd.... as director can be appointed after incorporation...   Coming to ur second point of uniformity in sales ... I totally agree with u that sales are not uniform but do u think that N/P is the result of merely Sales aspect??????? Many other incomes and expenses are taken to arrive at the figure of N/p...... Moreover the business acquired is a running business.....   Thanks to all of u for taking initiative to try this problem..... All the best .......

 THANKS ONCE AGAIN FOR CLARYFYING DOUBTS.

ram answer is correct

thnx every1... for giving the solution....

Hi  thanks to all .

Originally posted by : Faiz Ahmed
	Originally posted by : R Nelson Ram i dont agree with the above solutions  .... the sale has not been uniform throughout the nine months ... so profit will not be uniform for the 9 months .... the sale p.m for the first 6 months is half of the sale p.m of the remaining 3 months ...profit is higher in the last 4 months... g.p will be distributed on the basis of ratio of sales . moreover it is compulsory for public limited company to obtain certificate of commencement ... so the post incorporation period will be for 4 months..... ratio of sales of pre:post will be 1/2*5:1/2+(1*3) i.e 5:7 gp for post incorporation period will be 450000*7/12=262500 post incorporp. profit = 262500 - 34000 - {(216000/9)*4} = 142500 ....   First  regarding ur certificate of commence. business doubt.... A co. comes into existence on the date of incorporation and not on the date certificate of commencing business is recd. In this case after incorporation exp. like director fees is incurred which is possible that it might hv been charged b4 CCBusines is recd.... as director can be appointed after incorporation...   Coming to ur second point of uniformity in sales ... I totally agree with u that sales are not uniform but do u think that N/P is the result of merely Sales aspect??????? Many other incomes and expenses are taken to arrive at the figure of N/p...... Moreover the business acquired is a running business.....   Thanks to all of u for taking initiative to try this problem..... All the best .......

dude ... first of all .. let me tell u i have not compared net profit with sales ...if u c my solution its actually gross profit that has been distributed according to sales and other expenses have been proportioned purely on time basis ... u can refer to any book for dis kind of problems ... if it was like distributing n.p on basis of sales den dey would have not given the information about variability of volume of sales ...

2nd thing i agree a company comes into existence on certificate of incorporation but the for public limited company it is cumplusory to obtain certificate of commencement and only den commence business ..so only the period later than june 1 culd be treated as post incorporation .... u can refer Law and also some advanced accounting books... they have given the theory abt it .... 

nw the next thing is director remmuneration ...yes its right that they can be appointed after incorporation ... nw it is ur discretion and assumption hw will u provide for director expenses ... either u can distribute it 1:4 or put it completely in post ....

since these r all purely theoritical aspects hw u will treat director expenses u cannot tell that accurately ...

hope all these answers ur queries .... esp Mr. Faiz bhai jaan...

Dear Nelson Ram Bhai Jaan,,

I dont know why you called me bhai jaan... I am a small kid yaar... coming to point...

Even if i agree with your solution for 1 minute and calculate pre incorp g.p it will come as per ur calculation as INR 187500.(450000*5/12)... So as per question thr are no pre  period exp .... this means your Total N/p ( pre+post) comes to INR 330000/=  how????? See 187500+ 142500 = INR330000/=     BUT  the N/P as per question is only INR 200000/=.. How is it possible?????????

Hence your views are justified at your own stand and thoughts and my views are justified at my own understanding ...... Now no need to argue further bcz No one wins in an arguement...

All the best Nelson Ram Bhai jaan...

Originally posted by : Faiz Ahmed
	Dear Nelson Ram Bhai Jaan,, I dont know why you called me bhai jaan... I am a small kid yaar... coming to point... Even if i agree with your solution for 1 minute and calculate pre incorp g.p it will come as per ur calculation as INR 187500.(450000*5/12)... So as per question thr are no pre  period exp .... this means your Total N/p ( pre+post) comes to INR 330000/=  how????? See 187500+ 142500 = INR330000/=     BUT  the N/P as per question is only INR 200000/=.. How is it possible????????? Hence your views are justified at your own stand and thoughts and my views are justified at my own understanding ...... Now no need to argue further bcz No one wins in an arguement... All the best Nelson Ram Bhai jaan...

SIr u look at my first solution der r pre-expenses. its just i have not showed it ... see 450000 is n.p 200000 is g.p and 34000 is director exp... so the balfig turns out to be other exp....ie 216000 which i distributed on tme basis 96000 for post and 120000 for pre ..

Pre: 187500 - 120000= 67500

post: 262500 - 96000 - 34000= 132500. nw the total n.p comes out to be 200000 .... 

check out any book ... this will be the solution if sales r nt on uniform basis... i appeared pcc in may 2009 ... see solution for accounts queston on a similar question given for pre-post( given by icai).... else u can check out compiler... der is nothing more i could tell.... den reply if there is any mistake ... its nt that i m argung here

ok sir , Thanks a lot.... Anyway it was a good discussion... Sorry if you have been hurted at any moment of this discussion.

hei can i talk to u

first calculate N/p b4 directors fee which will be INR 234000/= this profit you divide between pre and post incorporation period in time ratio of 4:5. .Then post incorporation profit will be INR 130000/=

This profit of 130000 is deducted by a post incorp. exp of INR34000( director fee). the result will be INR 96000/== which is the profit of the co, available for dividend......

according to me the answer shall be 146000; as gross profit should be divided in sale proportion. and other expenes on perodical basis...