The following information regarding Maruti car Ltd. for the year ended 31st March.2017 is given to you.

Rs.
Sales 7,500,000
Purchases 5,000,000
Opening Stock (01/04/2016) 500,000
Closing Stock (31/03/2017) 750,000
Return Inward 75,000
Carriage Outward 57,000
Carriage Inward 50,000
Return Outward 50,000
Salesmen Salary 75,000
Advertising and Publicity 252,000
Salesmen Travelling Allowance 7,500

Rearrange above information in Vertical Form suitable for analysis.

for the year ended 31st March.2017 is given to you.

Computer Repairs and Maintenance 84,000

Rent, Rates, Taxes 4000
Printing and Stationery 400
Bad Debts 75,750
Purchase of Computer 40,000
Dividend on Shares (Cr) 10,000
Staff Welfare Expenses 44,000
Interest (Dr.) 50,000
Loss on Sales of Shares 125,000
Office Salary 400,000

ble for analysis.

Vertical Analysis
Income Statement %
Gross Sales 7,500,000 Ratio Exp/sales
Less:-Return Inward 75,000 7,425,000 100 Profit GP/Sales
COGS
Opening stock 500,000
Purchases 5,000,000
Return outward 50,000 4,950,000
Carriage inward 50,000
Less:-Closing stock 750,000
COGS 4,750,000 64% COGS/sales
GROSS PROFIT 2,675,000 36% GP/Sales
Operating expenses
(i) Office & Admin Exp
Computers Repairs 84,000
Rent,rates 4000
Printing & Stationery 400
Staff Welfare exp 44,000
Office salary 400,000 532,400
(ii) Selling and Distribution
Salesman salary 75,000
Advertising & Publicity 252,000
Salesman travelling allowances 7,500
Bad Debts 75,750
Carriage outward 57,000 467,250
Total operaing exp 999,650 13% Operating exp/sales
OPERATING PROFIT 1,675,350 23% OP/Sales
Add: non operating income
Dividend 10,000
Less:-non- operating exp
Loss on sales of shares 125,000
PBIT(after other income) 1,560,350 21% PBIT/Sales
Interest 50,000
PBT 1,510,350 20% PBT/sales
Income Tax 0
PAT 1,510,350 20% PAT/sales
Q2 You are required to present the above Balance Sheet in vertical form.
Equity share capital 250,000
12% Preference share capital 100,000
13.5% Secured debentures 100,000
Investment allowance reserve 15,000
General reserve 35,000
Profit & Loss A/c 25,000
Proposed dividend 37,000
Unclaimed dividend 5,000
Sundry creditors 83,000
Secured loan 87,000
Bank overdraft 25,000
Provision for depreciation 35,000
Provision for taxation 45,000
Provision for doubtful debts 12,000
854,000
Land & Building at cost 250,000
Plant & Machinery at cost 130,000
Furniture & Fixtures at cost 40,000
Stock in trade 110,000
Sundry debtors 142,000
Patents, trademarks & Designs 35,000
Loose tools 10,000
Cash & Bank balances 45,000
Marketable investments 45,000
Prepaid expenses 15,000
Temporary advances 12,000
Preliminary expenses 20,000

854,000
Vertical analysis
Sources of Funds
I Owners fund
Share capital
Equity share capital 250,000
12% pref share 100,000 350,000
R&S
Investment allowance Reser 15,000
General reserve 35,000
P&L 25,000
Total Reserve 75,000
Less:-Misc exp not written off
Preliminary exp 20,000 55,000
Shareholders fund /Net worth 405,000 68%

II Borrowed Fungs
a) secured loans
13.5% secured debentures 100,000
Secured loan 87,000 187,000
b) Unsecured loan 0 187,000 32%
TOTAL CAPITAL EMPLOYED 592,000

Application of Fund
Non-current assest
I) Fixed Assets
a) Tangible Assets
L&B at cost 250,000
P&M 130,000
F&F 40,000
Goss Block 420,000 71%
Less Depreciation 35,000
Net Block 385,000
b) Intangible Assets
Patent,tragemark 35,000 5.91%
Fixed Assets 420,000

iii) Working capital

a) Current Assets
Cash & bank balance 45,000
Marketable securities 45,000
Temporary advances 12,000
Debtors 142,000 244,000
Stock in trade 110,000
Prepaid exp 15,000
Loose tools 10,000 135,000 379,000

b) Current Liabilities
Porposed dividend 37,000
Provision for tax 45,000
Unclaimed ividend 5,000
Creditors 83,000
Bank OD 25,000
Provision for debtors 12,000 207,000
Net working capital 172,000 29%
TOTAL CAPITAL EMPLOYED 592,000 100
Particulars Rs. Particulars Rs.
Land & Building 120,000 Sundry Creditors 35,000
Plant & Machinery 145000 Reserves 25,000
Furniture & Fittings 3,500 Profit & Loss A/c 1-4-2016 9,450
Preliminary Expenses 4,800 Bank Overdraft 12,000
Calls in arrears (at Rs. 20 per share) 1,600 Return Outwards 4,000
Cash in hand 750 Sales 350000
5% Govt. Bonds 9,800 Share Capital 250000
Bills Receivable 21,000 6% debentures 86000
Delivery Van 35,000
Goodwill 40,000
Sundry debtors 21,000
Purchases 260000
Advertising 2,500
Sales Return 8,000
Legal Charges 1,200
Carriage Inwards 3,500
Wages 25,000
Rent, Rates and Insurance 3,000
Opening Stock 45,000
Prepaid Expenses 2,000
Travelling Expenses 1,500
Repairs to Plant & Machinery 800
Proposed Dividend 4,500
Salaries 12,000
771,450 771,450

1) Charge 5 % Depreciation on Plant and Machinery, 10% on Furniture & Fittings and 20% on Delivery Van. 
(2) Closing stock was Rs. 60550 as on 31st march, 2017. 
(3) Interest on Govt. Bonds and Debentures is to be ignored
 Income Statement

Sales 350000
Less:-Sales return 8,000
Net sales 342,000
Less:-COGS
Opening stock 45,000
Purchases 260000
Return outward 4,000 256,000
Carriage inward 3,500
Dep on P&M 7250
Wages 25,000
Repairs to P&M 800
Less:-Closing stock 60550
COGS 277,000
GROSS PROFIT 65,000

Operating exp
i) Office & Admin Exp
Dep on Furniture 350
Legal charge 1,200
Rent,rates,taxes 3,000
Salaries 12,000 16550
Selling & Distribution exp
Depreciation on Delivery 7000
Advertising 2,500
Travelling exp 1,500 11000
on Delivery Van.   Total Operating exp 27550
OPERATING PROFIT 37,450
Interest 0
PBT 37,450
Tax 0
PAT 37,450
 Balance sheet
SOURCES OF FUND
i) Shareholder fund
Share capital 250000
Calls in arrears 1,600 248,400
Reserve & Surplus
Reserve 25,000
P&L a/c
Opening bal 9,450
Profit 37,450
less:Preliminary exp 4,800 67,100
SHAREHOLDERS FUND 315,500
Borrowed Fund
Secured loan
6%debenture 86000
CAPITAL EMPLOYED 401,500

Application of Fund
i) Fixed Assets
Land & Building 120,000
Plant & Machinery 145000
Depreciation 7250 137750
Furniture & Fitting 3500
Depreciation 350 3150
Delivery Van 35,000
Depreciation 7000 28,000 288,900
Good Will 40000
Fixed Assets 328,900
Investment
5% Govt Bond 9,800

Working Capital
Current Assets
Cash in hand 750
B/R 21,000
Debtors 21,000
Prepaid exp 2,000
Closing stock 60550
Total current asset 105300
Current Liabilities
Proposed dividend 4,500
S.Creditors 35,000
Bank OD 12,000
Total CL 51,500
Net working capital 53,800
CAPITAL EMPLOYED 392,500

9,000