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Prepare Comparative Income Statement from the Following Information: - Accountancy

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Sum

Prepare Comparative Income Statement from the following information:

Particulars 2016-17
Rs.
2015-16
Rs.
Freight Outward 20,000 10,000
Wages (office) 10,000 5,000
Manufacturing Expenses 50,000 20,000
Stock adjustment (60,000) 30,000
Cash purchases  80,000 60,000
Credit purchases  60,000 20,000
Returns inward  8,000 4,000
Gross profit (30,000) 90,000
Carriage outward 20,000 10,000
Machinery 3,00,000 2,00,000
Charge 10% depreciation on machinery 10,000 5,000
Interest on short-term loans 20,000 20,000
10% debentures 20,000 10,000
Profit on sale of furniture 20,000 10,000
Loss on sale of office car 90,000 60,000
Tax rate 40% 50%
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Solution

Comparative Income Statement
for the year ended March 31, 2016 and 2017 

Particulars

Note

No.

2015-16

(Rs)

2016-17

(Rs)

Absolute 

Change
(Rs)

Percentage

Change

1. Revenue from Operations

 

2,16,000

92,000

(1,24,000)

(57.4)

2. Other Income

 

10,000

20,000

10,000

100

3. Total Revenue (1 + 2)

 

2,26,000

1,12,000

(1,14,000)

(50.44)

4. Expenses

 

 

 

 

 

a. Purchases of Stock-in-Trade

 

80,000

1,40,000

60,000

75

b. Change in Inventories

 

30,000

(60,000)

(90,000)

(300)

c. Employee Benefit Expenses

 

5,000

10,000

5,000

100

d. Finance Costs

 

21,000

22,000

1,000

4.54

e. Depreciation and Amortisation Expenses

 

5,000

10,000

5,000

100

f. Other Expenses

 

80,000

1,30,000

50,000

62.5

Total Expenses

 

2,21,000

2,52,000

31,000

14.03

5. Profit before Tax (3 – 4)

 

5,000

(1,40,000)

(83,000)

16.6

Less: Income Tax

 

2,500

-

(2,500)

(100)

6. Profit After Tax

 

2,500

(1,40,000)

(1,37,500)

55 

Working Notes:

1. Calculation of Net Sales 

Net Sales = Cost of Goods Sold + Gross Profit - Sales Return

or, Net Sales = Purchases + Manufacturing Expenses + Change in Inventory + Gross Profit - Sales Return

Net Sales (2016) = 80,000 + 20,000 +30,000 + 90,000 - 4,000 = Rs 2,16,000

Net Sales (2017) = 1,40,000 + 50,000 - 60,000 - 30,000 - 80,000 = Rs 92,000

2. Calculation of Finance Cost

Finance Cost = Interest on short-term loans + Interest on 10% Debentures

Finance Cost (2016) = 20,000 + 1,000 = Rs 21,000

Finance Cost (2017) = 20,000 + 2,000 = Rs 22,000

3. Calculation of Other Expenses

Other Expenses = Freight Outward + Carriage Outward + Loss on sale of office car

Other Expenses (2016) = 10,000 + 10,000 + 60,000 = Rs 80,000

Other Expenses (2017) = 20,000 + 20,000 + 90,000 = Rs 1,30,000 

Concept: Comparative Statements
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APPEARS IN

NCERT Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
Chapter 4 Analysis of Financial Statements
Numerical Questions | Q 3 | Page 185

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