Question

From the following particulars prepare a comparative statement of profit & loss of Prudence Ltd.

Particulars	2022	2021
Revenue from Operations	₹ 5,00,000	₹ 3,00,000
Cost of materials consumed	60% of revenue from operations	50% of revenue from operations
Indirect Expenses	30% of cost of materials consumed	20% of cost of materials consumed
Tax Rate	40% of Net Profit before Tax	40% of Net Profit before Tax

Answer 1

Comparative Statement of Profit & Loss of Prudence Ltd. for the years ending 31st March, 2022 and 2021
Particulars	Note No.	2021-22 (₹)	2020-21 (₹)	Absolute Change (Increase/Decrease) Base year 2020-21 (₹)	Percentage Change (Increase/Decrease) Base year 2020-21 (%)
I. Revenue from Operations		5,00,000	3,00,000	2,00,000	66.67
II. Less: Expenses:
Cost of Materials Consumed		3,00,000	1,50,000	1,50,000	100.00
Indirect Expenses		90,000	30,000	60,000	200.00
Total Expenses		3,90,000	1,80,000	2,10,000	116.67
III. Profit before Tax (I − II)		1,10,000	1,20,000	(10,000)	(8.33)
IV. Less: Tax		(44,000)	(48,000)	(4,000)	(8.33)
V. Profit after Tax (III − IV)		66,000	72,000	(6,000)	(8.33)

Working Note:

Step 1: Calculate Cost of Materials Consumed

2022: ₹ 5,00,000 × 60% = ₹ 3,00,000

2021: ₹ 3,00,000 × 50% = ₹ 1,50,000

Step 2: Calculate Indirect Expenses

2022: ₹ 3,00,000 × 30% = ₹ 90,000

2021: ₹ 1,50,000 × 20% = ₹ 30,000

Step 3: Calculate Net Profit before Tax

2022: ₹ 5,00,000 – ₹ 3,00,000 – ₹ 90,000 = ₹ 1,10,000

2021: ₹ 3,00,000 – ₹ 1,50,000 – ₹ 30,000 = ₹ 1,20,000

Step 4: Calculate Income Tax

2022: 40% of ₹ 1,10,000 = ₹ 44,000

2021: 40% of ₹ 1,20,000 = ₹ 48,000

Step 5: Calculate Net Profit after Tax

2022: ₹ 1,10,000 – ₹ 44,000 = ₹ 66,000

2021: ₹ 1,20,000 – ₹ 48,000 = ₹ 72,000