Profit & Loss Account of Difficult Ltd. for the year ended 31* October 2017. Particulars tock Staff Salaries ToS To Interest To Office rent To Printing and Stationery To Carriage outward To Discount s Salaries To Depreciation To Insurance To Motor bill To Salesmen’s Travelling Exp. To Bad Debts To Telephone Expenses To Legal Charges To Director's Fees To Income Tax To Loss on sale of bond To Provision for claim for damages To Net Profit zg Particulars 76,250 | By Sales: 5,10,000 3,15,250)Less: Returns _10,000 7,000 | By Closing Stock 20,000 | By Interest on Debenture 15,300) By Dividend on Shares 1,200 | By Profit on sales of shares 2,700 | 2,500] | 4,700) | 2,400) 9,300 1,000 350 2,000) 3,400 750 2,000 4,400 | 50,000 3,500) 4,000 84,000) 6,12,000 z 5,00,000 98,500 1,500 6,100 5,900 6,12,000 Convert the above Profit & Loss A/c. statement. of a company into a vertical revenueee 6. The following is the Profit and Loss Account of “me” Limited for the year ended 30" June 2017. Particulars z ___ Particulars z To Opening Stock: || By Closing Stock: Raw Materials 40,000 Raw Materials 2,000 Work in Progress. 20.000 60,000| — Work-in-Progress 14,000 | 16,000 To Purchase of Raw Material 56,000] By Sales 4,386,000 To Freight 32,000/Less: Returns 86,000 4,00,000 To Camiage inwards 16,000 | By Closing Stock 16,200 To Factory Rent | 8,000 To Other Factory Expenses 5,000 To Opening Stock of finish 30,000 goods To Purchases of Finish goods 1,54,000 Less: Returns 28,800 | ‘1,25,200 To Gross Profit e/d | 4,32,200. To Office Rent 10,000) By Gross Profit b/f 1,00,000 To Bank charges | 6,300) By Dividend 6,000 To Advertisement 16,000 | By Profit on Sale of Furniture 50,000, To Rent and Rates | 6,400 To Bad Debts (sales) 12,000 To Postage 1,600 To Printing | 1,200) To Other Selling expenses 2,000 To Insurance | 3,600) To Interest on over draft | 5,200} To Depreciation (office) 7,200) To Interest on Debenture 8,500 To Loss by Fire 20,000 To Provision for Taxation 26,000 To Net Profit after tax od. _ 30,000 1,56,000) 1,56,000| ~ You are required to convert above Profit and Loss Account into vertical form and determine the following: (1) Cost of Raw Materials consumed (2) Cost of Production (3) Net Profit before tax (! tax. (4) Cost of goods sold (5) Net Profit afterQuestion 3: Following are the Balance Sheet as on 31" December 2014 & 2015 of M/s. Amisha Ltd. Liabilities ‘Share Capital Securities Premium Profit and Loss A/c. Bank Overdraft Mortgage Loan (Secured on Plant) Provision for Tax Outstanding Expens Bills Payable 2014 | 2015 ‘Assets 2014 | 2015 | 10,000} —15,000| Leasehold Premises 8,000 7,500 6,000 1,000 | Plant & Machinery 4,200| . 8,500 500 3,000 | Furniture & Fixture 900 800 - 6,500 | Investments 600} 1,200 - 4,000 | Debtors 2,750| 9,450 Stock 4,650} 7,725 1,000 1,500 | Bank Balance 200 725 3,000 2,000 | Preliminary Expenses 400 300 1,200 3,200 21,700 36,200 21,700, 36,200 (1) Comparative Financial Statements in vertical form and to You are required to prepare (2) Offer your comments thereon.Example 9: From the following Profit & Loss Account and Balance Sheets of Ltd. for the year 2014 and 2015 you are required to prepare a com Income Statement and a comparative Balance Sheet. Profit & Loss Account for the year ended 31° December Particulars | 2014 «2015 Particulars 2014 | ToOpeningStock | 800 1,200 /| By Sales 6,000 To Purchases 3,000. 8,000 | By Closing Stock 1,200 To Labour Charges | 1,000 1,600 To Factory Exp. | 800 1,000 | To Gross Profit c/d 1,600, 1,200 aa | 7,200 | 13,000 | 7,200 | 1 To Salaries ~ 300) 200 | By Gross Profit b/d 1,600; 1 ToRentandRates | —-80 100 | By Profit on sale of fe | To Carriage Outward 120 100 | Investments 15 | To Delivery Expenses | 60 30) | To Advertisement 150, 100, | To Interest | 80 40 | To Bad Debts \ 10 - | To Depreciation | 130] 130 | To Prov. for Taxation 300 240 | To Net Profit | | transferred to General Reserve 385, 275 | 1,615 | 1,215 | [1,615] 4.Question I/7: Prepare a common size Financial Statements: Balance pncelia as on 31" March 20168 Liabilities | Aso |i Assets! ooauailorms ‘Sundry Creditors 1,050| Debtors 675 Outstanding expenses | 1,950/ Cash 2,775 Loans 5,625) Paid in Advance (Expenses) | 5,500 Capital 16,450 | Stock 2,500 Reserves | 2,500] Other Current assets 250 Fixed Assets (Less Deprec.) 15,875 q 27.575 27,575) Income Statement for the year ending on 31* March 2016. Expenses | hoe Income ae xd To Cost of goods sold | 17,775 By NetSales 31,725] To Advertisement 9,000 | By Other Income 300 To Administrative Exp. 2,300 To Taxation 950 | ToLosson Sale of Investment | 1,200} To Net Income | 800}23. The Piodes ¢ are the financial statements of Poddar Ltd. Analyse & ity your opinion Assets: Fixed Assets urrent Assets Cash Bills Receivables Stock Expenses Paid in Advance Total Assets : Liabilities: Capital ~ Current Liabilities: Bills Payable Expenses Payable Bank O. D. Total Liabilities Income Statement Sales Less: Cost of Sales Gross Margin Less: Expenses[Operating + Non operating] (ao 00 Net Income (4) _ (B) | (A) + (B) () | (D) | (C) +) 2012 2013 +2014” | 2,76,850 _2,46,650| 2,31,809 T 1,11,925| 32,975) 60,495) 68,375 1,24,750) 1,10,500 9,45,375 1,84,000) 1,69,625 8,775 4,625) 2,650, 7,11,300 5,938,000) 5,75,000 4,63,875 4,35,000 435,650. | 2,09,375 | 1,30,975 1,29,325 13,050, 7,725, 5,025 | 25,000| 19,300, 5 | 2,47, OS 1,58,000 1,39,350 711,300 93,000 75,000 10,93,925| 9,32,150) 8,70, 425 6,46,625 | 5,61,325) 5,25,825 | ~ 447,300) 3,70,825 -3,44,600) /4,06,475, 3,37,450 | 3,00,400combined Ratios example 10: From the following details calculate (1) Debt eital employed (3) Return on p ; “Equity Ratio (2) Return on toprietor’s funds ( 4) Return on Equity. summarised Balance Sheet ~~ Liabilities, z ea as ‘Equity Share Capital | 7,00,000 Land & Building | 12,00,000 Reserves 3,00,000 | Stock 1,00,000 9% Term Loans 4,00,000 | Debtors 1,10,000 Creditors 1,00,000 | Bills Receivables 80,000 | Bills Payable 50,000 | Cash at Bank 50,000 | Preliminary Expenses 10,000 | 15,50,000 15,50,000 Net profit for the year before interest and tax is % 2,50,000; tax rate is 50%. aeanalysis patio — sample 11: The summarised final accounts of J glance Sheet pt ae Liabilities JLtd. | K Ltd. | zg z share Capital ere | 42,000 35,000 g% Debentures 22,000 | 22,000 Curent lability 94,000 | 55,000 Revenue statement for the year Particulars Sales Less : Cost of Sales Gross Profit Less : Operating Expenses Net Profit before tax Less : Tax Profit after tax Less : Dividend Retained Earning 88,000 88,000 155 Ltd. & K Ltd, are as follows: Assets | JLtd. | K Ltd. wey, z z Fixed Assets | 1,21,000| 97,000 Current Assets | 1,25,000. 1,03,000 2,46,000 | 2,00,000 | z | Kitz 3,40,000 | 2,64,000 2,97,000 | 1,98,000 43,000 66,000 23,000} 44,000 [20,000 | ~ 22,000 | 12,000 9,000 [aoe GOe uy Zt ee 8,000/ 13,000 1,000 7,000_ fonetertlen 7,000, jreW8.000 You are required to calculate the following ratios and comment. (1) Proprietary ratio. (2) Capital gearing ratio. (3) Gross profit ratio. (4) Operating ratio, (5) Return on capital employed ratio. equity ratio. (7) Expenses ratio. (8) Net profit ratio. — __ (6) Return on proprietors’Example 12: "a Comment on the position of D Ltd. from the following: ' Profit and Loss Accounts and Balance Sheets after calculating ratios: (1) Current ratio. (2) Proprietary ratio. (3) Debi au ratio, vorking Capital ratio (5) Liquid ratio. (6) Cost of sales 0 sales Administrative exp. to sales ratio. (8) Selling expenses to sales ratio. Balance Sheet 2 c way . 1 Liabilities 2011 2010 Assets | 2011 2019 z x z z | Capital of $10 | 1,00,000 50,000 | Fixed Assets 90,000 | 99 | each : Reserves 80,000 34,000 | Current Assets | 2,00,000 } 1,00 oq Secured Loans 30,000 24,000 Cunent Liabilities | 26,000 30,000 Provisions | 54,000 | 52,000 | 2,90,000 | 1,90,000 | | 2,90,000 | 1,90,00) Profit and Loss Account for the year ended... ia Particulars | 2011 | 2010 | Particulars) 2011 | 2010 zy | 8 ‘To Opening Stock | 44,000! 40,000 | By Sales To Purchase 84,000 72,000 | By Closing | Stock To Wages | 40,000 36,000 To Factory 32,000 28,000 | Expenses. | To Administrative Expenses 8,000 6,000 | | To Selling | 6,000 10,000 | Expenses | | To Managerial | Remuneration 2,000, 2,000 | | To Transfer to 2,000 2,000 Reserve | To Income Tax 22,000 24,000 To Proposed 6,000 8,000 Dividend | To Balance o/d 10,000 16,000 2,56,000 | 2,44,000 >