A Company was incorporated on 1st August, 2018 to acquire the business of Shri Kumar from 1st April, 2018. The accounts for the year ended 31st March, 2019 disclosed the following: (i) There was a gross profit ₹ 2,40,000

Profit and Loss A/c for the year ending 31st March 2019 Particulars Pre incorporation Post incorporation Particulars Pre incorporation Post incorporation To Directors fees (post) - 15,000 By gross profit (5:7) 1,00,000 1,40,000 To Bad Debts (W.No.3) 1,021 529 To Advertising (5:7) 5,000 7,000 To Salaries & General Exp (1:2) 12,000 24,000 To Formation Expenses (post) - 5,000 To Donation (post) - 8,000 To Net profit 81,979 80,471 Total 1,00,000 1,40,000 Total 1,00,000 1,40,000 W. No. (i) Calculation of Sales Ratio Pre-incorporation Sales ₹ 376325 Post incorporation Sales ₹ 526855 (₹ 903180 - 376325) Sales Ratio- 5:7 (ii) Time Ratio = 4 months : 8 months = 1:2 (iii) Bad Debts ₹ 350 after September 2018. Balance ₹ 1200 (1550-350) was distributed is April to August sales rates as under: Particulars April to July August Sales 376325 526855/8 = 65856 Ratio 376325 : 65856 Bad Debts April to August ₹ 1200 to be allocated in the ratio 376325:65856: 1021 179