Corporate Accounting

6

Profits Prior to Incorporation

LEARNING OBJECTIVES

After studying this chapter you should be able to:

1. Understand “profits/losses prior to incorporation”.

2. Treat profits and losses prior to incorporation in the books of accounts of a company.

3. Ascertain profit or loss prior to incorporation by applying various methods.

4. Understand the different “ratios” used in ascertaining profit prior to incorporation.

5. Apportion various expenses and incomes between pre- and post-incorporation periods using different bases.

6. Allocate certain expenses wholly to pre- or post-incorporation periods directly.

7. Prepare profit and loss account and balance sheet in addition to the statement of profit/ loss prior to and after incorporation.

8. Appreciate and comply ...