ABC Ltd. was incorporated on 1.5.2016 to take over the business of DEF and Co. from 1.1.2016. The Profit and Loss Account given by ABC Ltd for the year ended 31.12.2016 is as under:Prepare a Statement showing allocation of pre-incorporation and post-incorporation profits after considering the following information:

(i) G.P. ratio was constant throughout the year.

(ii) Sales for January and October were 1/2 times the average monthly sales while sales for December were twice the average monthly sales. 

(iii) Bad Debts are shown after adjusting a recovery of ₹7,000 of Bad Debt for a sale made in July 2017.

(iv) Manager's salary was increased by ₹2,000 p.m. from 1.5.2016.

(v) All investments were sold in April 2016.

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Dr. Particulars To Rent and Taxes To Salaries including manager's Salary of 85,000 To Carriage Outwards To Printing and Stationery To Interest on Debentures To Sales Commission To Bad Debts (related to Sales) To Underwriting Commission Profit and Loss Account for the year ended 31.12.2016 ₹ Particulars 90,000 By Gross Profit 3,31,000 By Interest on Investment 14,000 18,000 25,000 30,800 91,000 26,000 28,000 45,000 11,200 3,90,000 11,00,000 To Preliminary Expenses To Audit Fees To Loss on Sale of Investments To Net Profit Cr. ₹ 10,64,000 36,000 11,00,000