> WHY 131 is NOT included in the network portion as it also has 1s in it.

The first two bits of the fourth octet in the "IP Address" (highlighted with * below) **are** included in the network portion. This is because the first two bits of the fourth octet in the "Subnet Mask" (highlighted with ! below) dictates this.

                                                                   **
    IP Address:       192.168.10.131  | 11000000.10101000.00001010.10000011    

                                                                   !!
    Subnet Mask:      255.255.255.192 | 11111111.11111111.11111111.11000000  

In other words, the subnet mask determines how many bits are network bits. Because the subnet mask takes the two most significant bits from the fourth octet (128 + 64), we get a subnet mask with its fourth octet set to 192.

As the host address uses the two least significant bits (1 + 2), we get 3. When that 3 is added to the last octet of the network address (128 + 3), we get 131.

By the way, in case you're interested I've written [quite a few blog posts][1] on subnetting.


  [1]: http://www.oznetnerd.com/2013/08/31/subnetting-made-easy-index/