A From the following information you are required to prepare a statement apportioning the retained profit between the pre-incorporation and post-incorporation periods, showing the basis of apportionment: $\square$

VU Limited was incorporated on 1 July 2012 with an authorised share capital of 60,000 ordinary shares of $£ 1$ each, to take over the business of $L$ and Sons as from 1 April 2012.

The purchase consideration was agreed at $£ 50,000$ for the net tangible assets taken over, plus a further $£ 6,000$ for goodwill.

Payment was satisfied by the issue of $£ 30,0008 \%$ loan notes and 26,000 ordinary shares both at par, on 1 August 2012. Interest at $10 \%$ per annum on the purchase consideration was paid up to this date.

The company raised a further $£ 20,000$ on 1 August 2012 by the issue of ordinary shares at a premium of $£ 0.25$ per share.

The abridged income statement for the year ending 31 March 2013 was as follows:

The company sells one product only, of which the unit selling price has remained constant during the year, but due to improved buying the unit cost of sales was reduced by $10 \%$ in the postincorporation period as compared with the pre-incorporation period.
Taxation is to be ignored.
(Chartered Institute of Management Accountants [part

(a) of question only])

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Sales: 1 April 2012 to 30 June 2012 1 July 2012 to 31 March 2013 Cost of sales for the year Depreciation 30,000 95,000 125,000 80,000 2,220 Directors' fees 500 Administration salaries and expenses 8,840 Sales commission 4,375 Goodwill impaired written off 1,000 Interest on purchase consideration, gross 1,867 Distribution costs (60% variable) 6,250 Preliminary expenses written off 1,650 Loan note interest, gross 1,600 Dividend paid on ordinary shares 7,560 115,862 Retained profits carried forward 9,138