Question

Vasundhra Ltd., a Company manufacturing high quality sanitary equipments decided to appoint instructors to impart free training to the youth of the city so that they may get suitable employment in various industrial units. Following information is derived from the books of the Company:

$\begin{array}{ccc}\text{Particulars}& \mathrm{31.3.2017}& \mathrm{31.3.2016}\\ \text{Revenue from Operations}& 12,00,000& 10,00,000\\ \text{Cost of Materials Consumed}& 6,60,000& 6,00,000\\ \text{Employee Benefit Expenses}& \mathrm{1.20.000}& 1,20,000\\ \text{Other Expenses}& 96,000& 50,000\end{array}$

You are required to :

(a) Prepare a Common Size Statement of Profit & Loss, and

(b) Identify the value involved.

Answer 1

$\text{Vasundhra Ltd.}$
$\text{COMMON STATEMENT OF PROFIT \& LOSS}$
$\text{for the years ended 31st March 2016 and 2017}$
$$\begin{array}{cccccc}\text{Particulars}& \text{Note}& \text{Absolute}& \text{Amounts}& \text{Percentage of}& \text{Revenue}\\ & \text{No.}& \text{2015-16}& \text{2016-17}& \text{from}& \text{Operations}\\ & & & & 2015-16& 2016-17\\ & & \text{Rs.}& \text{Rs.}& \%& \%\\ \text{I. Revenue from Operations}& & 10,00,000& 12,00,000& 100& 100\\ \text{II. Less : Expenses :}& & & & & \\ \text{Cost of Materials Consumed}& & 6,00,000& 6,60,000& {60}^{\left(1\right)}& {55}^{\left(4\right)}\\ \text{Employee Benefit Exp.}& & 1,20,000& 1,20,000& {12}^{\left(2\right)}& {10}^{\left(5\right)}\\ \text{Other Expenses}& & 50,000& 96,000& 5^{\left(3\right)}& 8^{\left(6\right)}\\ \text{Total Expenses}& & \overline{\underset{–}{7,70,000}}& \overline{\underset{–}{8,76,000}}& \overline{\underset{–}{77}}& \overline{\underset{–}{73}}\\ \text{III. Profit before Tax (I - II)}& & 2,30,000& 3,24,000& 23& 27\end{array}$$

All Percentages will be calculated on the basis of Revenue from Operations. Calculations of percentage is as follows :

Note :
$\begin{array}{cc}& \\ \text{Year 2015-16}& \text{Year 2016-17}\\ \left(1\right)\frac{6,00,000}{10,00,000}\times 100=60\%& \left(4\right)\frac{6,60,000}{12,00,000}\times 100=55\%\\ \left(2\right)\frac{1,20,000}{10,00,000}\times 100=12\%& \left(5\right)\frac{1,20,000}{12,00,000}\times 100=10\%\\ \left(3\right)\frac{50,000}{10,00,000}\times 100=5\%& \left(6\right)\frac{96,000}{12,00,000}\times 100=8\%\end{array}$

(b) Value Involved : Fulfilling Social Responsibility by providing free training to the youth.