What is a subnet? how do you implement subnetting? how can we show it using illustration?

What is Subnet?
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IP address carries two pieces of information:
The first part of IP address is a network address,
The second part is a HOST address.


Just exactly how many bits of the address represents the Network address is determined by the class of address and the subnet mask.


For example, computer reads the first 3 bits of the address and right away determines that it's a class C address. For a computer, it means that the first 3 octets (first 24 bits) is a network address, and the rest is the Host address.


Sometimes it is necessary to divide a network into smaller logical groups. This is called subnetting.


Advantages of subnetting are:
Reduced network congestion
Increase in network performance.


How can we implement Subnetting? Illustrate using Example
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To implement subnetting, we borrow some of the bits from the host address and use them for the subnet address.

Example:
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Let’s suppose we have a whole class C network assigned to us 110010101101110101100100. We can have 254 addresses available for us to use on our network. If we need to divide our network into 5 subnets, we would need to borrow 3 bits from the host address portion to use them to identify subnet address. We will have only 5 bits left to use for host addresses. We can have only 32 combinations with 5 bits, minus 2 because we cannot have addresses with all 1s or all 0s. So now we can have 5 subnets with 30 hosts on each one, totalling 150 hosts. Additionally, every subnet must have one host address reserved for the router interface because we need to use routers to connect our subnets. Now, we down to 29 addresses available for our computers on our 5 subnets. 29x5=145.


In order to implement subnetting, we use subnet masks to let our computers know how many bits from IP address will be used for the network address, and how many for the host address.


The default subnet mask for class C address is 255.255.255.0, in binary it looks like this:11111111111111111111111100000000


In order to borrow 3 bits from the host address part, we must create a custom subnet mask like this: 11111111111111111111111111100000 or 255.255.255.224


For Detailed answer, please check the followign link:
http://netlynk.blogspot.com/2007/07/ip-addressing-and-subnetting.html