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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 2015-16
Rs.
2016-17
Rs.
Manufacturing expenses 35,000 80,000
Opening stock 30,000 60% of closing stock
Sales 9,60,000 4,50,000
Returns outward 4,000 (out of credit purchase) 6,000 (out of cash purchase)
Closing stock 150% of opening stock 1,00,000
Credit purchases 1,50,000 150% of cash purchase
Cash purchases 80% of credit purchases 40,000
Carriage outward 10,000 30,000
Building 1,00,000 2,00,000
Depreciation on building 20% 10%
Interest on bank overdraft 5,000 -
10% debentures 2,00,000 20,00,000*
Profit on sale of copyright 10,000 20,000
Loss on sale of personal car 10,000 20,000
Other operating expenses 20,000 10,000
Tax rate 50% 40%

*There is a misprint in the book, this should be 2,00,000

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Solution

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

Particulars

Note

 No.

2015-16

(Rs)

2016-17

(Rs)

Absolute 

Change
(Rs)

Percentage

Change 

1. Revenue from Operations

 

9,60,000

4,50,000

(5,10,000)

(53.13)

2. Other Income

 

10,000

20,000

10,000

100

3. Total Revenue (1 + 2)

 

9,70,000

4,70,000

(5,00,000)

(51.55)

4. Expenses

 

 

 

 

 

a. Purchases of Stock-in-Trade

 

2,66,000

94,000

(1,72,000)

(64.7)

b. Change in Inventories

 

(15,000)

(40,000)

(55,000)

(366.7)

c. Finance Costs

 

25,000

20,000

(5,000)

(20)

d. Depreciation and Amortisation Expenses

 

20,000

20,000

- -

e. Other Expenses

 

30,000

40,000

10,000

33.33

 Total Expenses

 

3,26,000

1,34,000

(1,92,000)

58.90

5. Profit before Tax (3 – 4)

 

6,44,000

3,36,000

(3,08,000)

47.83

     Less: Income Tax

 

3,22,000

1,34,400

(1,87,600)

58.26

6. Profit After Tax

 

3,22,000

2,01,600

1,20,400

37.39

Working Notes:

1. Calculation of Net Purchases and Change in Inventory 

Net Purchases of stock in Trade = Cash Purchases + Credit Purchases - Purchases Returns

2013 = 120000 + 150000 - 4000 = Rs 266000

2014 = 40000 + 60000 - 6000 = Rs 94000

Change in Inventory = Opening Stock - Closing Stock

2013 = 30000 - 45000 = Rs (15000)

2014 = 60000 - 100000 = Rs (40000)

2. Calculation of Finance Cost

Finance Cost = Interest on Bank Overdraft + Interest on Debentures

Finance Cost (2016) = 5,000 + 20,000 = Rs 25,000

Finance Cost (2017) = 0 + 20,000 = Rs 20,000

3. Calculation of Other Expenses

Other Expenses = Carriage outward + Other operating expenses

Other Expenses (2016) = 10,000 + 20,000 = Rs 30,000

Other Expenses (2017) = 30,000 + 10,000 = Rs 40,000 

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 4 | Page 186

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