Analysing Comparative Statement of Profit and Loss

Q. Ayub and Amit are partners in a firm and they admit Jaspal into partnership w. e. f. 1st April, 2018. They agreed to value goodwill at 3 years' purchase of Super Profit Method for which they decided to average profit of last 5 years. The profit for the last 5 years were:

Year Ended	Net Profit (₹)
31st March, 2014	1, 50, 000
31st March, 2015	1, 80, 000
31st March, 2016	1, 00, 000	( Including abnormal loss of ₹ 1, 00, 000)
31st March, 2017	2, 60, 000	(Including abnormal gain (profit) of ₹ 40, 000)
31st March, 2018	2, 40, 000

The firm has total assets of ₹ 20, 00, 000 and Outside Liabilities of ₹ 5, 00, 000 as on that date. Normal Rate of Return in similar business is 10%.
Calculate value of goodwill.

Q.

Prepare a Comparative Income Statement from the following information :

$\begin{array}{ccc}\text{Particulars}& 31\text{st March},2017& 31\text{st March},2018\\ \text{Revenue from Operations}& 10,00,000& 12,50,000\\ \text{Cost of Materials Consumed}& 5,00,000& 6,50,000\\ \text{Other Expenses}& 50,000& 60,000\\ \text{Interest on investments @ Rs 30, 000 and tax payable @}& & \\ 50\%& & \end{array}$

Q.

What is a Realisation Account?

Q. Compute Cash Flow from Operating Activities from the following information:

Particulars	₹
Net Profit after Provision for Tax and Payment of Dividend	2, 15, 000
Provision for Tax	45, 000
Final Dividend paid during the year	50, 000
Depreciation	25, 000
Loss on Sale of Machinery	10, 000
Patents Amortised	30, 000
Gain on Sale of Land	70, 000
Income Tax Refund	30, 000

Q. From the following details. calculate Cash Flow from Investing Activities

Particulars	Closing (₹)	Opening (₹)
Machinery (At Cost)	10, 00, 000	9, 50, 000
Accumulated Depreciation	1, 50, 000	1, 10, 000
Patents	2, 00, 000	3, 00, 000

Additional Information:

1. During the year, machine costing ₹ 90, 000 with accumulated depreciation of ₹ 60, 000 was sold for ₹ 50, 000.
2. Patents written off were ₹ 50, 000 while a part of patents were sold at a profit of ₹ 40, 000.

Q. From the following information, calculate Opening and Closing Trade Receivables, if Trade Receivables Turnover Ratio is 3 Times:
(i) Cash Revenue from Operations is 1/3rd of Credit Revenue from Operations.
(ii) Cost of Revenue from Operations is ₹3, 00, 000.
(iii) Gross Profit is 25% of the Revenue from Operations.
(iv) Trade Receivables at the end are 3 Times more than that of in the beginning.

Q. Revenue from Operations ₹ 9, 00, 000; Gross Profit 25% on Cost; Operating Expenses ₹ 45, 000. Calculate Operating Profit Ratio.

Q.

Bhagwati Ltd. invited applications for issuing 2, 00, 000 equity shares of Rs 10 each. The amount were payable as follows :

On Application --Rs 3 per share.

On allotment --Rs 5 per share.

On first and final call -- Rs 2 per share.

Application were received for 3, 00, 000 shares and pro-rata allotment was made to all the applicants. Money overpaid on application was adjusted towards allotment money. B, who was allotted 3, 000 shares, 2, 500 shares were reissued as fully paid up @ Rs 8 per share.

Pass necessary journal entries to record the above transactions in the books of Bhagwati Ltd.

OR

(a) A company forfeited 200, shares of Rs 20 each, Rs 15 per share called up on which Rs 10 per share had been paid Directors reissued all the forfeited shares to B as Rs 15 per share paid up, for a payment of Rs 10 each . Give journal entries in the books of the company for forfeiture and re-issue of shares.

(b) A Ltd. forfeited 100 equity shares of the face value of Rs 10 each, for the non-payment of first call of Rs 2 per share. Rs 6 per share had already been called and paid. These shares were subsequently re-issued as fully paid at the rate of Rs 7 per share. Give journal entries in the books of the company for forfeiture and re-issue of shares.

Q.

How to calculate depreciation on fixed assets in excel?

Q. X and Y are partners in a firm. They admit Z into partnership for equal share. It was agreed that goodwill will be valued at three years' purchase of average profit of last five years. Profits for the last five years were:

Year Ended	31st March, 2014	31st March, 2015	31st March, 2016	31st March, 2017	31st March, 2018
Profit (₹)	90, 000 (Loss)	1, 60, 000	1, 50, 000	65, 000	1, 77, 000

Books of Account of the firm revealed that:
(i) The firm had gain (profit) of ₹ 50, 000 from sale of machinery sold in the year ended 31st March, 2015. The gain (profit) was credited in Profit and Loss Account.
(ii) There was an abnormal loss of ₹ 20, 000 incurred in the year ended 31st March, 2016 because of a machine becoming obsolete in accident.
(iii) Overhauling cost of second hand machinery purchased on 1st July, 2016 amounting to ₹ 1, 00, 000 was debited to Repairs Account. Depreciation is charged @ 20% p.a. on Written Down Value Method.
Calculate the value of goodwill.

Q.

From the following information, prepare Comparative Balance Sheets of X Ltd.:

$\begin{array}{ccc}\text{Particulars}& \mathrm{31.03.2017}& \mathrm{31.03.2016}\\ & \text{Rs.}& \text{Rs.}\\ \text{Reserve and Surplus}& 12,00,000& 6,00,000\\ \text{Share Capital}& 10,00,000& 10,00,000\\ \text{Trade Payables}& 12,70,000& 9,00,000\\ \text{Land and Buildings}& 16,00,000& 15,00,000\\ \text{Plant and Machinery}& 6,30,000& \text{5, 00, 000}\\ \text{Goodwill}& -& 1,00,000\\ \text{Investments}& 1,20,000& 1,00,000\\ \text{Current Assets}& 15,20,000& \text{8, 00, 000}\\ \text{Long term Borrowings}& 4,00,000& 5,00,000\end{array}$

Q.

Q.

The profit of Philips Ltd. after appropriations was Rs. 2, 50, 000. This profit arrived at after taking into consideration the following items:
$$\begin{array}{ccc}\text{S. No.}& \text{Particulars}& \text{Amount}\\ 1.& \text{Depreciation on Fixed Tangible Assets (Machinery)}& 20,000\\ 2.& \text{Loss on Sale of Fixed Tangible Assets (Furniture)}& 2,000\\ 3.& \text{Goodwill written off}& 9,000\\ 4.& \text{Provision for Taxation}& 35,000\\ 5.& \text{Transfer to General Reserve}& 17,500\\ 6.& \text{Gain on Sale fo Fixed Tangible Assets (Machinery)}& 8,000\end{array}$$

Additional Information:

$$\begin{array}{ccc}\text{Particulars}& \text{31-03-2016}& \text{31-02-2017}\\ & & \\ \text{Trade Receivables (All good)}& 50,000& 62,000\\ \text{Trade Payables}& 45,000& 55,000\\ \text{Inventory}& 12,000& 8,000\\ \text{Income Received in Advance}& 8,000& -\\ \text{Outstanding Expenses}& 6,000& 3,000\\ \text{Prepaid Expenses}& -& 5,000\\ & & \end{array}$$

Q.

Prepare a comparative statement of profit and loss for the year ended 31st March, 2015 from the following information :

$\begin{array}{ccc}\text{Particulars}& \text{31st March, 2015 (Rs)}& \text{31st March, 2014 (Rs)}\\ \text{Revenue from Operations}& 10,00,000& 5,00,000\\ \text{Purchase of stock-in-trade}& 6,50,000& 2,00,000\\ \text{Change in Inventories of Stock}& 60,000& 50,000\\ \text{Other Expenses}& \text{10\% of cost of revenue from}& \text{20\% of cost of revenue from}\\ & \text{operations}& \text{operations}\\ \text{Tax Rate}& 40\%& 30\%\end{array}$

Q.

Calculate Cash Flow from Investing Activities from the following particulars:
$$\begin{array}{ccc}& \text{1st April, 2014}& \text{31st March, 2015}\\ & \text{Rs.}& \text{Rs.}\\ \text{Plant and Machinery}& 7,20,000& 8,60,000\end{array}$$

Additional Information:
(i) Depreciation charged during the year Rs. 85, 000.
(ii) Plant and machinery having a written down value of Rs. 1, 10, 000 was sold for Rs. 1, 25, 000

Q.

Prepare a Comparative Statement of Profit & Loss from the following details :

$\begin{array}{ccc}& 31-03-2018& 31-03-2017\\ & & \\ \text{Revenue from Operations}& \text{Rs.}30,00,000& \text{Rs.}20,00,000\\ \text{Other Income}\left(\%\text{of Revenue from Operations}\right)& 15\%& 20\%\\ \text{Expenses}\left(\%\text{of Operating Revenue}\right)& 60\%& 50\%\end{array}$

Q.

A financial statement that summarizes company revenue and expenses is _________.

1. Balance sheet

2. Statement of owner's equity

3. Statement of Profit and Loss

4. Statement of Cash Book

Q. Which are the errors which does not affect the trial balance?

1. Wrong recording in the original books.
2. Error in balancing the account.
3. Forgetting to write cash book balance in the trial balance.
4. Omission of Casting.

Q.

What are the limitations of the written down value method?

Q. Calculate following ratios on the basis of the given information:
(i) Current Ratio;
(ii) Acid Test Ratio;
(iii) Operating Ratio; and
(iv) Gross Profit Ratio.

	₹			₹
Current Assets	70, 000		Revenue from Operations (Sales)	1, 20, 000
Current Liabilities	35, 000		Operating Expenses	40, 000
Inventory	30, 000		Cost of Goods Sold or Cost of Revenue from Operations	60, 000

Q.

From the following information prepare a Comparative Statement of Profit & Loss of Victor Ltd. :

$\begin{array}{ccc}& \mathrm{31.03.2017}& \mathrm{31.03.2016}\\ & \text{Rs.}& \text{Rs.}\\ \text{Revenue from Operations}& 18,00,000& 15,00,000\\ \text{Cost of Materials Consumed}& 14,00,000& 11,00,000\\ \text{Other Expenses}& 12\%\text{of Materials}& 10\%\text{of Materials}\\ & \text{Consumed}& \text{Consumed}\\ \text{Income Tax}& 50\%& 40\%\end{array}$

Q.

From the following information, prepare Comparative Statement of Profit and Loss of X Ltd :

$\begin{array}{ccc}\text{Particulars}& 31-03-2016& 31-03-2015\\ & \text{(Rs)}& \text{(Rs)}\\ & & \\ \text{Revenue from Operations}& 25,00,000& 20,00,000\\ \text{Cost of Materials Consumed}:& 21,00,000& 16,00,000\\ \text{Other Expenses}& 25\%\text{of Gross Profit}& 20\%\text{of Gross Profit}\\ \text{Income Tax}& 50\%& 50\%\end{array}$

Q.

Prepare a Comparative Statement of Profit & Loss from the following :

$\begin{array}{ccc}\text{Particulars}& \text{31st March},2016& \text{31st March,}2017\\ & \text{Rs.}& \text{Rs.}\\ \text{Revenue from Operations}& 10,00,000& 12,50,000\\ \text{Cost of Materials Consumed}& 5,00,000& 6,50,000\\ \text{Other Expenses}& 50,000& 60,000\end{array}$

Interest on investments @ Rs 30, 000 each year.

Q.

Following are the Balance Sheets of Krish Tech Ltd. for the year ended 31st March, 2012 and 2013 (Revised).
$\begin{array}{ccccc}\text{Particulars}& & \text{Note}& \text{Amount (Rs)}& \text{Amount (Rs)}\\ & & \text{No.}& 2012-13& 2011-12\\ \text{1. Equity and Liabilities}& & & & \\ \text{(1) Shareholders' Funds}& & & & \\ \text{(a) Share Capital}& & & 12,00,000& 8,00,000\\ \text{(b) Reserves and Surplus (Profit}\&\text{Loss Balance)}& & & 3,50,000& 4,00,000\\ \text{(2) Non-current liabilities}& & & & \\ \text{Long term borrowings}& & & 4,40,000& 3,50,000\\ \text{(3) Current liability : Trade Payables}& & & 60,000& 50,000\\ & \text{Total}& & 20,50,000& 16,00,000\\ \text{II. Assets}& & & & \\ \text{(1) Non-current Assets}& & & & \\ \text{(a) Fixed Assets}& & & & \\ \text{(i) Tangible Assets}& & & 12,00,000& 9,00,000\\ \text{(2) Current Assets}& & & & \\ \text{(a) Inventories}& & & 2,00,000& 1,00,000\\ \text{(b) Trade Receivables}& & & 3,10,000& 2,30,000\\ \text{(c) Cash and cash equivalents}& & & 3,40,000& 3,70,000\\ & \text{Total}& & 20,50,000& 16,00,000\end{array}$

Prepare a Cash Flow Statement after taking into account the following adjustments.

(a) The company paid interest Rs 36, 000 on its long-term borrowing.

(b) Depreciation charged on tangible fixed assets was Rs 1, 20, 000.

Q.

Prepare a Comparative Statement of Profit & Loss of Ahmed Ltd., with the help of the following information :

$\begin{array}{ccc}\text{Particulars}& 31-03-2018& 31-03-2017\\ & \text{(Rs.)}& \text{(Rs.)}\\ & & \\ \text{Revenue from Operations}& 8,00,000& 5,00,000\\ \text{Purchase of Stock in Trade}& 4,20,000& 2,40,000\\ \text{Changes in Inventories}& 80,000& 60,000\\ {\text{Employee Benefit Expenses}}^{\ast }& 20,000& 40,000\\ \text{Other Expenses}& 40,000& 30,000\\ \text{Income Tax}& 50\%& 40\%\end{array}$

* Employee Benefit Expenses means expenses incurred on employees. It includes expenses such as salaries and wages, contribution to Provident Fund, staff welfare etc.

Q.

What are the types of depreciation?

Q.

With the help of the following information obtained from the books of Raj Silk Mills, prepare Comparative Statement of Profit and Loss for the year ended 31st March, 2016 :

$\begin{array}{ccc}\text{Particulars}& 31\text{st March},2016& 31\text{st March},2015\\ \text{Revenue from Operations}& 300\%\text{of Cost of}& 200\%\text{of Cost of}\\ & \text{Materials Consumed}& \text{Materials Consumed}\\ & & \\ \text{Expenses :}& & \\ \text{Cost of Materials Consumed}& \text{Rs.}12,00,000& \text{Rs.}10,00,000\\ \text{Other Expenses}& 20\%\text{of Cost of}& 10\%\text{of Cost of}\\ & \text{Materials Consumed}& \text{Materials Consumed}\\ \text{Tax}& 50\%& 50\%\end{array}$

Q.

Prepare a Comparative Statement of Profit & Loss from the following :

$\begin{array}{ccc}\text{Particulars}& 31-03-2014& 31-03-2013\\ & \text{(Rs.)}& \text{(Rs.)}\\ \text{Revenue from Operations}& 50,00,000& 30,00,000\\ \text{Finance Costs}& 30,00,000& 27,00,000\\ \text{Employee Benefit Expenses}& 4,00,000& 3,00,000\\ \text{Other Expenses}& 40,000& 50,000\end{array}$

Income Tax is 40% of Net Profit

Q. Anand Ltd. arrived at a net income of Rs. 5, 00, 000 for the year ended March 31, 2007. Depreciation for the year was Rs. 2, 00, 000. There was a gain of Rs. 50, 000 on assets sold which was credited to profit and loss account. Bills receivable increased during the year by Rs. 40, 000 and bills payable activities by Rs. 60, 000. Compute the cash flow from operating activities by the indirect approach.

Q.

Prepare a Common-size income statement of Shefali Ltd. with the help of following information:

Particulars	2015-16 Rs.	2016-17 Rs.
Sales	6, 00, 000	8, 00, 000
Gross profit	50% of sales	45% of sales
Indirect expense	25% of gross profit	25% of gross profit
Less: Cost of goods sold	4, 28, 000	7, 28, 000
Other incomes	10, 000	12, 000
Income tax	30%	30%