Académique Documents
Professionnel Documents
Culture Documents
BY NEHA GUPTA
Sometime
EXAMPLE:
The
NOTE:
It
ASCERTAINMENT
OF
PROFIT OR LOSS
In
STEP
2:
Three Ratio calculated :
Sale ratio
Time ratio
Vendor ratio
SALES RATIO: Sales ratio is calculated
on the basis of sales made between
date of purchase to date of
incorporation and date of incorporation
to the date of balance sheet.
EXAMPLE
Sales
= 50000:80000
i.e
=
5:8
TIME
RATIO:
It is calculated by taking into
consideration the time from the date of
purchase of business to the date of
incorporation and from date from
incorporation to the date of balance
sheet.
EXAMPLE:
Date of incorporation on 1st April,01 to
take over the already existing business
from 1January,01. Z ltd prepares its
final accounts on 31st December,01.
(c) Neha Gupta, AGBS Mohali'
Time
RATIO:
It is calculated on the basis of date of
purchase, date of incorporation and
date of settlement of claims.
(c) Neha Gupta, AGBS Mohali'
EXAMPLE:
A
3 months : 3 months
1:1
STEP
3
Profit and loss account is prepared as
follow separately for two periods
gross profit should be allocated on the
basis of sales ratio.
expenses that are connected with sales
should be allocated on the basis of sales
ratio.
expenses incurred on the basis of time
should be allocated on the basis of time
ratio.
(c) Neha Gupta, AGBS Mohali'
Expenses
TREATMENT
OF LOSS PRIOR TO
INCORPORATION
Loss prior to incorporation being of
capital nature shall be debited to
separate account called loss prior to
incorporation account and shown under
miscellaneous expenditure on the asset
side of the balance sheet to the extent
not written off.
Loss prior to incorporation can be dealt
in any of the following manner:
(c) Neha Gupta, AGBS Mohali'
write
ILLUSTRATION
(c) Neha Gupta, AGBS Mohali'
Date
Sales
CALCULATION
TIME RATIO:
(D.O.P to D. O. I ):
OF RATIOS
(D.O.I to D.
O.Balance
sheet)
1.1.01- 1.5.01 :
1.5.01- 31.12.01
4 month
:
8 month
Time ratio 1 : 2
SALES RATIO:
100X2 + 200X6
200 + 1200 = 1400
Sales ratio 400 : 1400 = 2 : 7
(c) Neha Gupta, AGBS Mohali'
Vendor
4 months
:
1 months
Vendors ratio= 4 : 1
SOLUTION OF ABOVE QUERY..
Net
OR
Gross profit= net profit+ indirect
expenses
CALCULATION
OF
GROSS PROFIT
PARTICULARS
AMOUNT
Net profit
ADD: Depreciation
540000
audit fees
26000
directors fee
60000
Preliminary
240000
expenses
Office expenses
selling expenses
198000
Interest to vendor
Gross profit
50000
TOTAL
1000000
2124000
(c) Neha Gupta, AGBS Mohali'
To deprecia
To audit f
PRE I
POST I
180000
8667
360000
17333
To dire;s f
60000
To prelim
exp(post)
10000
80000
44000
160000
154000
To Off exp
To selling e
To interest to 40000
vendor (4 : 1)
To capital
reserve
119333(ba
l. Fig)
To net profit
Total
PRE I
POST I
By sales 472000
1652000
10000
880667(b
al. Fig)
472000
1652000
472000
165200
BALANCESHEET
AS ON 31ST DECEMBER, 2001
(c) Neha Gupta, AGBS Mohali'
LIABILITIES
AMOUNT
ASSETS
AMOUNT
SHARE
CAPITAL(4000000
+4000000)
8000000
GOODWILL(500
0000-3000000600000-400000)
1000000
CAPITAL
RESERVE
119333
PATENTS
400000
MACHINERY
5500000540000(DEPR)
496000
CLOSING
STOCK
600000
OTHER ASSETS
1940000
PROFIT AND
LOSS ACCOUNT
TOTAL
880667
9000000
TOTAL
9000000
NOTE
The