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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 | |
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Solution
| 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 | |
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| Dr. | Trading, Profit and Loss Account for the year ended as on 31st March,2020 |
Cr. | |
| Particulars | Amount ₹ | Particulars | Amount ₹ |
| To Opening stock | 20,000 | By Sales | 1,20,000 |
| To Purchases | 90,000 | By Closing Stock | 30,000 |
| To Carriage inward | 500 | ||
| To Wages | 10,000 | ||
| To Gross Profit c/d | 29,500 | ||
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| 29,500 | 29,500 | ||
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