Question

Convert the following Trading and Profit and Loss Account into Vertical Income Statement:

Dr.	Trading, Profit and Loss Account (for the year ended 31st March, 2020)		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Opening stock	50,000	By Sales	6,00,000
To Purchases	4,50,000	By Closing Stock	1,50,000
To Carriage	20,000
To Direct expenses	30,000
To Wages	50,000
To Gross Profit c/d	1,50,000
Total	7,50,000		7,50,000
To Office expenses	62,500	By Gross Profit b/d	1,50,000
To Finance expenses	15,000
To Selling expenses	50,000
To Net Profit c/d	22,500
Total	1,50,000		1,50,000

Answer 1

Vertical Income statement as on 31st March, 2020
Sr. No.	Particulars	Amount (₹)	Amount (₹)
1.	Sales		6,00,000
2.	Less: Cost of goods sold
	Opening Stock	50,000
	Purchases	4,50,000
	Carriage	20,000
	Direct expenses	30,000
	Wages	50,000
		6,00,000
	Less: Closing Stock	1,50,000	4,50,000
3.	Gross Profit		1,50,000
4.	Less: Operating Expenses		127,500
	Office expenses	62,500
	Finance expenses	15,000
	Selling expenses	50,000
5.	Net Profit		22,500