eqUired t o
Ownéd
Assets
Total Net
Illustration 4:
year ended 31-3-2014
Profit and Loss Account forthe
Amount
Rs.
80,000 Amount Particulars Rs.
150,000 Particulars Rs. 6,02,350T
2,00,000
21,500 Opening Stock
OSS
76,250 By SalesS
3,15,250| Less: Retums 10,000 5,92.350 la
To Purchases
To OS COS 98,500
1,43,500
o 7,000 By Closing Stock(-
Bonds J D T
1,500
240,000 To Freight and Carriage 20,000 ByInterest on 3,750
5,000 ToStaffSalares 15,300 By Dividends on Shares 3,900
10,000 To Sales Salanes 1,200 By Profit on Sale of Shares o T
b
20,000 ToIntereston Debentures 2,700
870,000 To Rentt O
2,500
To Printingand StationaryOA 4,700
To Advertising
Rs. ToSales Discount
ToDepreciation
D 2,400
9,300
1,000
To Insurance ae 350
To Electricityda 2,000
To Salesmen's Travelling Expenses 3,400
To Bad Debts O
To Telephone Expenses Aejm 750
30,000 ToLegal Charges did 6,400
TO Directors 48,000
To Loss on Sale of BondsNo [p 3,500
15.000 P doe to
5.000 To Provision for Claim for Damages N
To Net Profit
1,650 D
1,76.350 etee
7,00,000 7,00,000
Present the above in vertical form suitable for analysis.
0000
Decisions (BMS
Managerial
32 Vipul's Accounting for
-2014
Rs.
Solution: Vertical Income Statement for the yearended Rs.
Particulars Rs.
Gross Sales 6,02,350
Less: Sales Retuns 10,000 5,92,350
Net Sales
Less: Cost of Goods Sold:
Opening Stock 76,250
Purchases 3,15,250
Freight and Carriage o 7,000
3,98,500
Less: Closing Stock
Cost of Sales 98,500
3,00.000
Gross Profit 2,92,350
Less: Operating Expenses:
Administration Expenses:
Staff Salaries
Rent 20,000
2,700
Printing and Stationary 2,500
Insurance 1,000
Electricity 350
Telephone Expenses 750
Legal Charges 6,400
Directors Fees
Total Administration Expenses 48,000
Selling and Distribution Expenses: 81.700
Sales Salaries
Advertising 15,300 AD
Salesmen's Travelling Expenses 4,700
Total Selling and Distribution
Expenses 2.000
Finance Expenses: 22,000
Sales Discount
Bad Debts 2,400
Total Finance Expenses 3,400
Total Operating Expenses
Earnings Before Depreciation, Interest and Tax
(EBDIT)
5.800
Less: Depreciation
1.09.500
Eanings Before Interest and Tax (EBIT) 1.82.850
Less: Interest on Debentures
Net Operating Profit 9.300
Add: Non-Operating Income: 1,73.550
Interest on Bonds 1.200
Dividend on Shares 1,72.350
Profit on Sale of Shares 1,500
3,750
Less: Non-Operating Expenses: 3,900
Loss on Sale of Bonds
Provision for Claim for 9.150
Net Profit Damages
3,500
1,81,500
Illustration 5: 1.650
From the following Trial 5.150
Revenue statement for the yearBalance of Jyoti Ltd. as 1,76,350
after making the necessary ended 31st March, 2014 on 31st
adjustments: and verticalMarch, 2014, prepare
Equity Share Capital Particular Balance prepare vertical
sheet as on thatvertical
Plant and Machinery
Sales date
Total Operating Expenses 1,73,550
Eamings Belore Depreciation, Interet 1,200
Less: Depreciation
Eamings BeloreInterest and Tax(EBIT) 1,72,350
Less: Interest on Debentures
Net Operating Proft
Add: Non-Operating Income:
Interest on Bonds
Dividend on Shares 9,150
3,900 1,81,500
Profit on Sale of Shares
Less: Non-Operating Expenses:
Loss on Sale of Bonds 3,500 5,150
Provision for Claim for Damages 1,650
1,76,350
Net Profit
Illustration 5:
From the following Trial Balance of Jyoti Ltd. as on 31st March, 2014, prepare vertical
Revenue statement for the year ended 31st March, 2014 and vertical Balance sheet as on that date
after making the necessary adjustments:
Particulars Rs. Rs.
Equity Share Capital
Plant and Machinery 11,00,000
Sales 12,00,000
37,00,000
Statements ating VVV 33
Study of Financial
17,00,000
Purchases
Sundry Debtors 9,00,000
Sundry Creditors 8,50,000
Wages CO 3,50,000
Opening Stock S 1,20,000
Salaries
Advertisement 1D
OS
rloslhetC0an t3en2 scnels3ispi 1,80,000
75,000
Telephone Charges 0 35,000
2,00,000
FurnitureA 5,00,000
Investment (Long Term)
Interest Received 40,000
Loss on Sale of Furniture o 20,000
Commission 60,000
Profit and Loss Alc 1,20,000
Interim Dividend 50,000
General Reserve DOS 1,00,000
Cash At Bank 3,20,000
BillsReceivable 2,00,000
59,10,000 59,10,000
Adjustments:
(a) Stock on 31st March, 2014 was valued at Rs. 3,00,000 tieT gce.afneie
(b) Make provision of Rs. 3,00,000 for Income Tax.
(c) Depreciate plant and machinery 20% and Furniture 10%
Solution: Vertical Income Statement for the year ended 31st March,2014Rs.in '000)
Dolution:
Particulare Re Rs. Rs.
Solution:
Solution: Vertical Income Statement for20%
the
and Furniture 10%.
year ended 31st March, 2014
Particulars Rs.
(Rs. in '000)
'000)
Sales
Less: Cost of Goods Sold:
Rs. Rs.
3,700
Opening Stock
Purchases 120
Wages 1,700
Less: Closing Stock 350
Cost of Goods Sold 300
GROSS PROFIT 1.870
Less:Operating Expensees: 1,830
Administrative Expenses:
Salaries
Telephone Charges 180
Total Administrative Expenses 35
Selling and Distribution Expenses: 215
Advertisement
Commission 75
Total Selling and Distribution 60
Total Operating Expenses
Expenses 135
Eamings Before Depreciation, Interest and Tax (EBDIT) 350
Less: Depreciation on: 1,480
Plant and Machinery
Funiture 240
Eamings Before Interest and Tax (EBIT/Net 20 260
Add: Non-Operating Income: Operating Profit 1,220
Interest Received
40 40
Less: Non-Operating Expenses: 1,260
Loss on Sale of Fumiture
Net Profit Before Tax 20 20
|Less: Provision for
Net Profit After Tax Income Tax 1,240
300
940
34
Add: Opening Balance
Vipul'sTM Accounting for Mdnagerial Decisions
Amount Available for (BMS)
Appropriations
Less: Appropriations:
120
Interim Dividend
Balance Transferred to Balance dsd1,060
Sheet 50
Vertical Balance Sheet 50
Particulars as on 31st March, 2014 1,010
() SOURCES OF FUNDS:
(1) Owned Funds: Rs. Rs.
(Rs. in '000)
Equity Share Capital Rs.
Add: Profit and Loss A/c
Add: General Reserve 1,100
Net Worth/Total onle
Capital Employed
(10) APPLICATION OF FUNDS:
1,010
(1) Fixed Assets: 100
Plant and Machinery
Less: Denranintinn
2.210
