#2 Profit Prior to Incorporation - Problem 1 -By Saheb Academy

This is the first problem of Profit Prior to Incorporation. In this video I have shown how to
1. Analyse and understand the question
2. Calculate ratios i.e. TIME RATIO and SALES RATIO
3. Divide the expenses and income into PRE & POST
3. Prepare Profit and Loss statement and find out Profit Prior to & Post Incorporation.
After watching this video you will be easily able to prepare Profit and Loss Statement with two columns i.e. PRE and POST.
This is for the students of B.COM, BBA, CA INTER and any other accounting courses which has this chapter in its syllabus.
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[@anushabc7863]

Sir if bad depts how to show pre and post

[@SahebAcademy]

Bad Debts are allocated on the basis of Sales Ratio. Why?
Because Bad Debts happens when you SELL goods on credit and your customer doesn’t pay you so you assume debts have gone bad.
That is why Bad Debts are directly related with SALES.
So Sales Ratio.

[@SahebAcademy]

In this problem there are Bad Debts so watch the whole video to see.

[@SahebAcademy]

But sometimes there can be an adjustment of Bad Debts ( additional info)
For example
Sometimes they may directly say Rs.300 out of Rs.500 Bad Debts are of PRE period.
Then you can immediately understand the remaining Rs.200 are of POST period.

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Bhai agar sales ka amount diya nhi hogs to

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