MANAGEMENT ACCOUNTING COMPARATIVE STATEMENT

Q1. Prepare comparativeIncome statement & comparative balance sheet in vertical form and offer your brief
comments:
Profit & Loss A/cs. For the years ended
Particulars 31-3-2000 31-3-2001 Particulars 31-3-2000 31-3-2001
Amount Amount Amount Amount

To Opening Stock 44000 40000 By Sales 190000 200000

To Purchases 84000 72000 By Closing Stock 46000 44000
To Wages 40000 36000 By Interest Received 20000 --
To Factory Expenses 32000 28000  
TO Establishment Expenses. 8000 6000  
To Management Expenses 2000 2000  
To Selling Expenses 6000 10000  
To Interest 6000 8000  
To Loss on sale of Assets 2000 2000  
To Provision for Taxation 22000 24000  
To Net profit trf to Reserve 10000 16000  
 Total 256000 244000  Total 256000 244000

Balance Sheet as at
31-3-2000 31-3-2001 Assets 31-3-2000 31-3-2001
Equity Capital 50000 70000 Fixed Assets 70000 82000
Preference Capital 20000 -- Investments 20000 10000
Current Assets Excluding Bank
Reserves 50000 68000 100000 92000
Balance
Secured Loans 22000 24000 Bank Balance 10000 20000
Unsecured Loans 30000 -- Loans & Advance 40000 30000
Creditors 20000 25000 Preliminary Expenses 12000 10000
Outstanding
6000 5000      
Expenses
Provisions 54000 50000      
Unclaimed
-- 2000      
Dividend
 Total 252000 244000  Total 252000 244000

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Q2. From the following Financial Statements of Nikhil Ltd. prepare comparative financial statements in
Vertical form and give comments in brief.
Profit and Loss Account for the year ended 31st December
2001 2002 2001 2002
 
Rs. Rs. Rs. Rs.
To Opening Stock 40,000 60,000 By Sales 8,00,000 1,000,000
 ”  Purchases 495,000 620,000  ”  Closing Stock 60,000 80,000
 ”  Wages 125,000 200,000  
 ”  Gross Profit 200,000 200,000  
  860,000 1,080,000   860,000 1,080,000
To Administrative Exp. 50,000 60,000 By Gross Profit 200,000 200,000
 ”  Selling Expenses 25,000 30,000  ”  Non-Operating Income 10,000 50,000
 ”  Finance Expenses -- 10,000  
 ”  Provision for Tax 54,000 60,000  
 ”  Proposed Dividend 20,000 25,000  
 ”  Retained Earnings 61,000 65,000  
   
   
 Total 210,000 2,50,000 Total  210,000 2,50,000

Balance Sheet as on 31st December

2001 2002 2001 2002
Liabilities Assets
Rs. Rs. Rs. Rs.
Share Capital 200,000 200,000 Land & Building 50,000 40,000
Reserves 86,000 151,000 Machinery 175,000 212,000
Debentures -- 100,000 Office Equipments 20,000 50,000
Current Liabilities 116,000 137,000 Stock 60,000 80,000
  Debtors 66,000 167,000
  Cash 31,000 39,000
 Total 402,000 5,88,000 Total  402,000 588,000

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Q3. From the data presented by M/s. Jyoti Petro Limited, prepare comparative Statement in vertical form and offer your
comments.
Liabilities 2001 2002 Assets 2001 2002
Rs. Rs. Rs. Rs.
Creditors 163 146 Cash & Bank 50 40
Outstanding Exps. 13 22 Debtors 77 73
15% Debentures 90 70 Stock 202 190
Depreciation Provision 40 44 Prepaid Expenses 1 2
Capital Reserve 6 7.8 Land & Building 100 100
P & L A/c. 10 15.2 Machinery 72 80
Equity Capital 180 180      
Total Rs. 502 485 Total Rs. 502 485

Q4. Complete the following Comparative Statements of DT Ltd. by ascertaining the missing balances.
Absolute Increase or % Increase or
Particulars 2002Rs. 2003Rs.
Decrease Decrease
           
(A) Sales ? ? (+)4,00,000 +25.00%
  Cost of goods sold        
  Opening Stock 80,000 1,20,000 ? ?
  Purchases ? ? (+)2,00,000 +20.00%
  Wages 2,40,000 4,40,000 ? ?
  Less: Closing Stock ? 1,60,000 ? ?
(B) Cost of goods sold ? ? ? ?
(C) Gross Profit (A-B) ? ? ? ?
  Less: Operating Expenses        
  a. Administrative ? ? (+)20,000 +20.00%
  b. Selling 50,000 60,000 ? ?
  c. Finance ? ? (+)4,500 +22.50%
(D) Total Operating Expenses ? ? ? ?
  Net Operating Profit (C-D) ? ? ? ?
  Add : Non-Operating 20,000 1,00,000 ? ?
Income
  Net Profit before Tax ? ? ? ?
  Less : Provision for Tax ? ? ? ?
  Net Profit after Tax 2,10,000 2,35,000 ? ?

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Q5. Complete the following comparative statement of Swaraj Pvt. Ltd. by ascertaining the missing figure..
Comparative Balance Sheet as on 31st December.
Particulars 2002 2003 Absolute Increase or % Increase or Decrease
Rs. Rs. Decrease Rs. Rs.
(A) SOURCES OF FUNDS        
     Equity Share Capital 1,20,000 1,20,000 - -
Reserves & Surplus 20,000 48,000 ? ?
OWNER’S FUNDS 1,40,000 1,68,000 ? ?
         
BORROWED FUNDS:        
10% Debentures ? ?    
TOTAL FUNDS AVAIABLE (A) 1,60,000 2,00,000 ? ?
(B) APPLICATION OF FUNDS:        
(a) Fixed Assets 80,000 ? ? +75%
(b) Working Capital:        
(i) Current Assets:        
    Inventories 50,000 ? (-) 10,000 ?
    Receivables ? 56,000 (-) 40,000 ?
    Cash ? 24,000 (-) 6,000 ?
Total Current Assets 1,40,000 1,20,000 (-) 20,000 ?
      (ii) Current Liabilities        
           Creditors ? ? - -
Working Capital (i-ii) 80,000 60,000 ? ?
APPLICATION OF FUNDS (B)
1,60,000 2,00,000 ? ?
(a+b)

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Q6.Complete the following comparative statement of Mahesh Pvt. Ltd. by ascertaining the missing figures and
underline the missing figures ascertained
Particulars 2003 2004 Absolute Increase/ Increase/Decrease%
Rs. Rs. DecreaseRs.
Sales 6,00,000 ? +3,00,000 ?
Cost of Goods Sold : Opening
? 60,000 +10,000 ?
Stock
Purchases 4,00,000 ? +80,000 ?
Closing Stock ? ? ? ?
Cost of Goods Sold ? ? +97,500 +25%
Gross Profit ? ? ? ?
Operating Expenses        
(a) Administrative Exp. 40,000 ? ? +100%
(b) Financial Exp. 60,000 72,000 ? ?
(c) Selling Exp. ? 1,50,000 +1,00,000 +200%
Total Operating Exp. ? ? ? ?
Net Profit Before Tax 60,000 1,10,500 ? ?
Provision for Tax ? ? ? ?
Net Profit after Tax 36,000 ? +27,000 +75%

Q7. The following are the Balance sheets of Hayat Ltd. for the year ending 31st March, 2004 and 2005.
31-3-04 31-3-05 31-3-04 31-3-05
Liabilities Assets
Rs. Rs. Rs. Rs.
Equity share capital 4,00,000 4,00,000 Fixed assets less depreciation 4,80,000 9,20,000
Preference share capital 2,00,000 2,00,000 Stock 80,000 40,000
Reserves 40,000 60,000 Debtors 2,00,000 1,50,000
Profit and loss account 30,000 40,000 Bills receivable 40,000 60,000
Bank overdraft 1,00,000 4,60,000 Prepaid expenses 20,000 24,000
Creditors 80,000 1,00,000 Cash at bank 1,00,000 1,66,000
Provision for taxation 40,000 50,000
Proposed Dividend 30,000 50,000
9,20,000 13,60,000 9,20,000 13,60,000
From the above prepare Vertical Balance Sheet suitable for analysis and do Horizontal comparison showing
absolute Increase/Decrease and Percentage.

Q8. Financial Position

2005 2006
Liabilities
Rs. Rs.
Equity Share Capital 2,00,000 2,50,000
10% Pref. Share Capital 2,00,000 1,50,000
Reserve Fund 80,000 1,00,000
Profit and Loss Account 1,00,000 1,50,000
12% Debentures 2,00,000 3,00,000
Creditors 1,00,000 1,20,000
Bank Overdraft 50,000 20,000

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Assets
Building 3,00,000 3,20,000
Machinery 1,50,000 1,80,000
Furniture 40,000 35,000
Investment 1,00,000 1,50,000
Stock 1,50,000 2,00,000
Debtors 1,00,000 1,20,000
Bank Balance 90,000 85,000
From the above information of Santhan Ltd. as at 31st March, 2005 and 2006 you are required to comment with
the help of comparative statement, after rearranging in suitable form for analysis.

Q9 Balance Sheets of Star Ltd. for the year ended 31st December, 2006 and 31st December, 2007 are as follows.
31st Dec. 06  31st Dec. 07 31st Dec. 06  31st Dec. 07
Liabilities Assets
Rs. Rs. Rs. Rs.
Equity Share Capital 8,00,000 8,00,000 Building 6,00,000 5,40,000
10% Pref. Share Capital 6,00,000 6,00,000 Land 2,00,000 2,00,000
General Reserves 4,00,000 4,90,000 Plant 6,00,000 5,40,000
15% Debentures 2,00,000 3,00,000 Furniture 2,00,000 2,80,000
Creditors 3,00,000 4,00,000 Stock 4,00,000 6,00,000
Bills Payable 1,00,000 1,50,000 Debtors 4,00,000 6,00,000
Tax Payable 2,00,000 3,00,000 Cash 2,00,000 2,80,000
26,00,000 30,40,000 26,00,000 30,40,00
Prepare Comparative Balance Sheet in vertical form and offer your comments in brief on fixed Assets.

Q10. Prepare a Comparative Revenue Statement in Vertical Form from the following details:
Nilkamal Ltd.
Trading, Profit and Loss Account for the year ended 31st March
2006  2007 2006  2007
Particulars Particulars
Rs. Rs. Rs. Rs.
To Opening Stock 2,25,000 3,00,000 By Sales 45,00,000 60,00,000
To Purchases 22,50,000 32,10,000 By Closing Stock 3,00,000 3,60,000
To interest on Debenture 1,50,000 1,50,000 By Dividend 12,000 39,000
To Depreciation: By Profit on Sale of Machinery 24,000 -
Furniture 15,000 15,000
Machinery 36,000 30,000
To Administrative Expenses 2,94,000 4,41,000
To Selling Expenses 4,56,000 7,53,000
To Carriage Outward 75,000 3,15,000
To Loss by Fire - 15,000
To Wages 1,95,000 3,00,000
To Provision for Tax 5,70,000 4,35,000
To Net Profit 5,70,000 4,35,000
48,36,000 63,99,000 48,36,000 63,99,000

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 TREND & RATIO

Q1.Rearrange the balance Sheet in vertical form and calculate the trend percentage taking 1992 figures as 100
and briefly comment on the same.
Balance Sheet as on 31st December (Rs. In lacs)
Liabilities 1992 1993 1994 1995 Assets 1992 1993 1994 1995
Share 60 60 80 80 Building 50 60 55 80
Capital
Reserve 50 45 20 20 Goodwill 50 45 40 40
Surplus 13 32 31 40 Machinery 20 40 43 50
Debentures 10 20 20 30 Stock 05 15 25 05
Secured 12 08 10 20 Debtors 20 14 15 10
Loans
Creditors 06 08 10 03 Cash 05 01 02 15
Bank 01 02 08 04 Preliminary 03 02 01 -
Overdraft Expenses
Other 01 02 02 03          
Liabilities
  153 177 181 200   153 177 181 200
Q2. On the basis of the following balances as at 31 December, 1995 extracted from the books of Alpha Ltd.
st

You are required to

a) From the following Trends Statements for the year 31 st December, 1995, 1996 and 1997 ascertain the
missing balances.
b) Give your interpretation on the same.
Particulars Balance as on Trend as on Balance as on Trend as on Balance as on Trend as on
31.12.95 31.12.95 31.12.96 31.12.96 31.12.97 31.12.97
  Rs. % Rs. % Rs. %
Fixed Assets 1,60,000 100 ? 150 ? 200
Less: Depreciation 60,000 100 ? 150 ? 250
Provision
Net Fixed Assets 1,00,000 100 ? 150 ? 170
Current Assets:
Stock 3,00,000 100 ? 120 ? 140
Debtors 4,50,000 100 ? 120 ? 160
Bank balance 1,00,000 100 ? 80 ? 110
Short term ? ? ? ? ? ?
Advances
Total Current 10,00,000 100 ? 120 ? 144
Assets
Less: Current 3,00,000 100 ? 110 ? 130
Liabilities
Working Capital ? ? ? ? ? ?
Capital Employed ? ? ? ? ? ?
Debentures 4,00,000 100 ? 75 ? 50

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Net Worth ? ? ? ? ? ?

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Q3.Following figures have been extracted from the books of Voodoo Ltd.:

Particulars Balance as on Trend as on Balance as on Trend as on Balance as on Trend as on

31.12.95 31.12.95 31.12.96 31.12.96 31.12.97 31.12.97
  Rs. % Rs. % Rs. %
Fixed Assets 1,60,000 100 ? 150 ? 200
Less: Depreciation 60,000 100 ? 150 ? 250
Provision
Net Fixed Assets 1,00,000 100 ? 150 ? 170
Current Assets:
Stock 3,00,000 100 ? 120 ? 140
Debtors 4,50,000 100 ? 120 ? 160
Bank balance 1,00,000 100 ? 80 ? 110
Short term ? ? ? ? ? ?
Advances
Total Current 10,00,000 100 ? 120 ? 144
Assets
Less: Current 3,00,000 100 ? 110 ? 130
Liabilities
Working Capital ? ? ? ? ? ?
Capital Employed ? ? ? ? ? ?
Debentures 4,00,000 100 ? 75 ? 50
Net Worth ? ? ? ? ? ?
You are required to
A) Rearrange above figures in the vertical form and b) Calculate –
i) Debt - equity ratio  ii) Proprietary ratio  iii)   Capital gearing ratio

Q4 The Balance Sheets of contractors Ltd., as on 31st December, 1996 and 1997 were as follows: (Rs. In thousand)

1996 Liabilities 1997 1996 Assets 1997

1,500 Equity Share Capital 1,700 1,800 Fixed Assets 2,100
500 12% Preference Share 400 550 Sundry Debtors 650
570 Reserve 770 430 Bills Receivable 525
300 10% Debentures 450 380 Stock 460
240 Creditors 320 20 Prepaid Expenses 30
50 Bills Payable 70 80 Bank Balance 65
100 Bank Overdraft 120      
3,260   3,830 3,260   3,830
During the year 1997, total sales were Rs. 1,20,00,000 and cash sales were 20% of total sales. Stock turnover
ratio was 20 times. Net profit before payment of taxes at 50% was Rs. 18,00,000.
There were no, non-operating expenses and non-operating incomes.
Calculate the following Rates for the year 1997:

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i) Gross Profit Ratio. ii) Operating Ration iii) Current Ratio. iv) Debtors turnover ratio and collection period v)
Return on capital employed.

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Q5. The following is the Trading & Profit & loss A/c and Balance Sheet of Sunder Mumbai Ltd.
Trading and Profit and Loss Account as on 31st March, 2002.
Particulars Amount Particulars Amount
To opening Stock 10000 By sales 150000
TO Purchases 55000 By Closing Stock 15000
To Wages 20000    
To Power & Fuel 10000    
To Gross Profit c/d 70000    
  165000   165000
To Administration Expenses 15000 By Gross Profit b/d 70000
To Interest 3000 BY Rent Received 1500
To Depreciation on Machinery 5000    
To Selling Expenses 12000    
To Loss by Fire 2000    
TO Provision for Tax 14500    
To Net Profit 20000    
  71500   71500
To Interim Dividend 10000 By Opening Balance 15000
To Closing Balance 25000 By Net Profit 20000
  35000   35000
Balance Sheet as on 31st March, 2002
Liabilities Rs. Assets Rs.
Equity Share Capital 100000 Land & Buildings 50000
Profit & Loss A/c. 25000 Plant & Machinery 30000
Creditors 15000 Furniture 20000
Secured Loans 10000 Stock 15000
Bank Overdraft 25000 Debtors 15000
Provision for tax 5000 Investments 12500
Outstanding Expenses 5000 Cash 17500
Goodwill 20000
Proposed Dividend 40,000 Miscellaneous Expenses 5000
 Total 185000  Total 185000
Calculate the following ratios after converting above financial statements in Vertical Form:
(i) Inventory Turnover Ratio (ii) Gross Profit Ratio (iii) Operating Ratio
(iv) Current Ratio
(v) Proprietary Ratio
(vi) Liquid Ratio

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Q6. Calculate Trend Percentage from the following information extracted from Financial Statements of Excellent
Fashions Ltd. After arranging in vertical form. Give your comments.Round off percentage :-                                 
(Rs. In ‘000)

Particulars 1998Rs. 1999Rs. 2000Rs. 2001Rs.

Profit & Loss Accounts
Sales 10000 11000 12000 13000
Cost of Sales 7500 8175 8850 9525
Expenses 800 935 1140 1287
Interest 225 300 375 450
Profit before Tax ? ? ? 1738
Tax 590 636 654 695
Profit after Tax 885 ? ? ?
Balance Sheet
Fixed Assets ? ? ? ?
Current Assets 15000 ? 17800 ?
Current Liabilities ? 10900 ? 12800
Net Working Capital 5000 5500 5950 6450
Net Worth 10000 10700 11100 11600
Loans (Liabilities) 5000 6000 7000 8000
Q7. The following are balance sheet as on 31st March, 2001 of two different companies.
Balance Sheet (Rs. In lacs)
Liabilities TinyLtd. GiantLtd. Assets TinyLtd. GiantLtd.
Trade Marks & Copy
Equity Share Capital 1000 2000 200 500
Right
General Reserve 200 500 Building 500 1000
Profit & Loss A/c 300 600 Machinery 400 900
Preference Share Capital 400 800 Furniture 10 50
Secured Loan 250 600 Stock 700 1500
Provision for Income Tax 100 200 Trade Investments 100 150
Bank Overdraft 50 100 Debtors 600 1400
Creditors 400 1000 Bills Receivable 100 200
Provision for Doubtful
10 20 Goods with consignee 10 20
Debts
      Share Issue Expenses 90 100
 Total 2710 5820  Total 2710 5820
Investment depreciated by 10% which effect is required to be given.
Prepare Commonsize Balance Sheet in vertical form. Also compute following ratios & give your comments :-
(i) Debt Equity Ratio                      
(ii) Stock Working Capital Ratio

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Q8. Calculate return on total resources from the following information :

Particular X. Ltd Y. Ltd

Net sales 1268750 ?
Total assets ? 42500
Net Profit ratio 4% 20%
Gross Profit ? 4680
Gross Profit Ratio 10% 25%
Turnover of Total assets (Sales/Total assets) 5 times ?
(b) A trader carries average stock of Rs. 50000 & turns this over 5 times a year at a gross profit ratio of 20%.
His administrative & selling overheads are Rs. 20000 per year. Find out the net profit.

(c) The current ratio of a company is 2:1 & current assets were Rs. 300000 which of the following transactions
would:
(a) Improve the ratio
(b) Reduce the ratio &
(c) Not alter the ratio.
(i) Pay a current liability of Rs. 40000
(ii) Sell a machinery of Rs. 50000 on cash payment of Rs. 30000 & balance credit.
(iii) Endorse a bill of exchange of Rs. 30000 to supplier.
(iv) Purchase material of Rs. 25000 for cash.

Q9. X Ltd. and Y Ltd. are in the same line of business. Followings are their Balance Sheets as on 31st
December, 2002

Balance Sheet as on 31st December 2002

Liabilities X Ltd. Y Ltd. Assets X Ltd. Y Ltd.

Rs. Rs. Rs. Rs.
Equity Share Capital 700,000 200,000 Land 100,000 80,000
Reserve & Surplus 100,000 100,000 Building 250,000 200,000
12% Debentures 200,000 500,000 Plant & Machinery 500,000 300,000
Creditors 120,000 70,000 Debtors 210,000 110,000
Bills Payable 40,000 20,000 Stock 100,000 200,000
Proposed Dividend 20,000 20,000 Cash & Bank 55,000 40,000
Provision for Tax 35,000 20,000      
 Total 1,215,000 930,000  Total  1,215,000 930,000

You are required to rearrange the Balance Sheets (in Vertical form) and calculate the following ratios for both
the companies and comment thereon (any three)(a) Proprietary ratio, (c) Current ratio,

(b) Capital-Gearing ratio, (d) Stock Working capital ratio.

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Q10. From the following figures of AX Ltd; prepare Vertical Revenue Statement and Vertical Balance Sheet and calculate
following ratios :-(a) Operating Ratio            (c) Stock Turnover Ratio.(b) Debtors Turnover Ratio (in No. of times based on
closing debtors)

Balances as on 31st December, 2002

Rs.   Rs.
Sales ( Credit ) 7,50,000 Fixed Assets (at W.D.V. ) 4,00,000
Debtors 1,47,000 Creditors 1,00,000
Bank Balance 10,500 Closing Stock 2,00,000
Purchases 6,00,000 Bank Overdraft 1,25,000
Expenses 75,000 Depreciation 60,000
Interest on Overdraft 20,000 Interest on Loan 21,500
Loan 1,00,000 Equity Share capital 1,50,000
8% Preference Capital 50,000 Reserves & Surplus (including current year surplus) 1,04,000
 Provision for Income Tax 99,000 Proposed Dividend for 2002 30,000
Further information:
(i) Stock on 1st January, 2002 Rs. 1,00,000.
(ii) Income Tax Provision on 1st January, 2002 was Rs. 62,250.
(iii) Tax Provision for the current year was made at 50% of profits.
Note: Interest on Overdraft and Loan is to be treated as Operating Expense

Q11. You are furnished with the following revenue statements for the four years ended 31st December: --

1999Rs. 2000Rs. 2001Rs. 2002Rs.

Sales 50,000 60,000 72,000 86,400
Cost of Sales 32,000 38,000 46,000 56,000
Margin 18,000 22,000 26,000 30,400
 Management Exps. 3,000 3,500 4,000 4,500
Sales Exps. 5,000 6,000 7,200 8,640
Interest on Loans 3,000 4,000 5,000 6,000
Total Exps. 11,000 13,500 16,200 19,140
Profit before Dep. 7,000 8,500 9,800 11,260
Depreciation 5,000 4,500 6,000 6,500
Profit before tax 2,000 4,000 3,800 4,760
Income Tax 800 2,000 1,850 2,400
You are required to make trend analysis (absolute figures need not be shown) and comment in brief on change
in Gross Profit, Net Profit before Tax.

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Q12 You are required to complete the following Balance-Sheet as at 31st October, 2002 of Net Set Ltd.

Liabilities Rs. (in Lakhs) Assets Rs. (in Lakhs)

Share Capital 10 Fixed Assets 15
Reserves & Surplus ? Current Assets :  
Loans 1 Stock                              ?  
Current Liabilities ? Debtors                           ?  
    Cash                               ? ?
Rs. ? Rs. ?
Ratios of the company are :-
(i) Reserve & Surplus to share Capital Ratio 1:1
(ii) Sales to Net worth Ratio 1.5:1
(iii) Sales to Debtors Ratio 6:1
(iv) Gross Profit Ratio 20% on sales
(v) Net working Capital Rs. 6 lakhs
(vi) Stock Turnover Ratio 6 times
(vii) Current Ratio 2.5:1
(viii) Acid Test Ratio 1.5:1
Net worth means total of share capital and Reserves and surplus.
Q13. Following is the Profit and Loss Account of Saurav-balanced Limited for the year ended 31st March, 2002. You are
required to prepare Vertical Income statement for the purpose of analysis.
Particulars Rs. In Lacs Particulars Rs. In Lacs
To Opening Stock 700 By Sales  
To Purchase 900     Cash                                     520  
To wages 150    Credit                                   1500  
To Factory Exps. 350 2020  
To Office Salaries 25    Less: Returns and Allowances    20 2000
To Office Rent 39 By Closing Stock 600
To Postage & Telegram 5 By Dividend on Investment 10
To Directors Fee 6 By Profit on Sale of Furniture 20
To Salesman Salaries 12    
To Advertising 18    
To Delivery Exps. 20    
To Debenture Interest 20    
To Depreciation      
     On Office Furniture 10    
     On Plant 30    
     On Delivery Van 20    
To Loss on Sale of Van 5    
To Income Tax 175    
To Net Profit 145    
Total 2,630 Total 2,630

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b) From the Vertical Income Statement Calculate:

(i) Gross Profit Ratio

(ii) Operating Costs Ratio including Finance Expenses
(iii) Stock Turnover Ratio

Q14 Complete the following Trend Statement of Yuvraj by filling the blanks and comment in very brief.

Rs. In Lakhs Trend in %

Particulars
1999 2000 2001 2002 1999 2000 2001 2002
Sales 10,000   12,000 13,000 100 110   130
Less cost of Sales     8,850     109    
Gross Profit 2,500     3,475     126  
Administrative Expenses     1,140     117    
Sales Expenses 225     450   133    
Total Operating Expenses 1025   1,515 1,737        
Net Profit before Tax       1,738   108    
Income Tax   636       108   118
Net Profit after Tax 885   981   100      

Q15. Cosmos India Ltd."Balance Sheet as on 31st  December, 2003

Liabilities Rs. Assets Rs.

Capital Reserve 1,26,000 Copyright 1,00,000
General Reserve 1,20,000 Cash 21,000
Provision for Tax 50,000 Calls in Arrears 9,575
Commission received in Adv. 10,875 Plant & Machinery 4,20,000
15% Debentures 1,60,000 Debtors 3,00,425
12% Bank Loan 40,000 Prepaid Insurance 15,375
6% Pref. Share Capital 2,00,000 Land & Building 5,00,000
Equity Share Capital 10,00,000 Fixtures 25,000
Bills Payable 49,125 Furniture 75,000
Profit and Loss A/c. 9,000 Preliminary Expenses 18,625
Bank Overdraft 10,740 Goodwill 1,00,000
Share Premium 15,000 Investments (Long Term) 1,75,000
Sundry Creditors 1,89,260 Stock 2,00,700
    Marketable Investments 19,300
  19,80,000   19,80,000
You are required to rearrange the above Balance Sheet in vertical form and compute the following ratios:
(a)Current Ratio
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(b)Proprietary Ratio
(c)Capital Gearing Ratio

Q16. Complete the following Balance Sheet from the information given below :

Balance Sheet as on 31st December, 2003

Liabilities Rs. Assets Rs.

Equity Share Capital ? Fixed Assets ?
(of Rs. 100 each)      
Reserve & Surplus ? Current Assets  
10% Debentures 400,000 Stock ?
Current Liabilities   Debtors ?
Sundry Creditors ? Other Current Assets ?
Other Current Liabilities 200,000    
  ?   ?

Following information is available :

(1) Sales for the year Rs. 48 lakhs

(2) Gross Profit Ratio 25%
(3) Net Profit after tax Rs. 2,00,000
(4) Purchases and Sales on credit basis.
(5) Debtors Turnover Ratio 12 times (Sales/Debtors).
(6) Creditors Turnover Ratio 12 times (Cost of Sales/Creditors)
(7) E.P.S. Rs. 20 per share
(8) Stock Turnover Ratio 10 times
(9) Debt Equity Ratio 0.25 : 1
(10)Current Ratio 1.6. : 1.

Q17. Following financial statements are of XYZ Ltd. for 2004

Trading and Profit Loss A/c for the year ended 31st March, 2004.

  Rs.   Rs.
To opening stock 70,000 By Sales 16,60,000
To Purchases 15,00,000 By Closing Stock 1,60,000
To Gross Profit 2,50,000    
       
  18,20,000   18,20,000
To Depreciation 36,000 By Gross Profit 2,50,000
To Other Expenses 74,000 By Commission 10,000
To Tax Provision 40,000    
To Proposed Dividend 16,000    

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To Net Profit 94,000    
  2,60,000   2,60,000

Balance Sheet as at 31st March 2004

Share Capital 3,00,000 Cash 48,000

Bank Overdraft 38,000 Stock 1,60,000
Creditors 34,000 Debtors 1,38,400
Provision for Depreciation 54,000 Land and Building 92,000
Provision for tax 40,000 Machinery 1,28,600
Proposed Dividend 16,000 Goodwill 20,000
Profit & Loss A/c 1,80,000 Loan and Advance 60,000
    Preliminary Expenses 15,000
  6,62,000   6,62,000
Re-arrange the above in a vertical form & also calculate:
(a)   Stock Turnover Ratio.
(b)   Debtors Turnover Ratio.
(c)   Creditors turnover Ratio.

Q18. From the following information, you are required to prepare a Balance-Sheet in Horizontal form :

Current 1.75
Ratio                                                                     
Liquid Ratio 1.25
Stock Turnover Ratio 9 times (Based on Closing Stock)
Gross Profit Ratio 25%
Debtors collection period 1.5 months
Reserves and surplus to share capital 0.2
Cost of Goods sold to Fixed Assets 1.2
Capital Gearing (Long term Loans to Share Capital) 0.6
Fixed Assets to shareholders Funds 1.25
Sales for the year (All are on Credit Basis) Rs. 12,00,000

Current Assets consisted of Cash, Stock & Debtors only. The company has not issued pref. shares. There are no
Bank Overdraft & Fictitious Assets.

Q19. M/s. Rajesh & Co. gives you the following information. Prepare trading and profit and loss account for the
year ended 31st March, 2004 and balance sheet as on that date in as much detail as is possible. 20

Opening Stock Rs. 90,000

Stock Turnover Ratio 10 times
Net Profit Ratio on Turnover 15%
Gross Profit Ratio on Turnover 20%

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 Current Ratio 4: 1
Long Term Loan Rs. 2, 00,000
Depreciation on Fixed Assets @ 10 Rs. 20,000
Closing Stock Rs, 1, 02,000
Credit period allowed by suppliers One month
Average Debt collection period Two months
 

On 31st March, 2004 current Assets consisted of stock, debtors and cash only. There was no bank overdraft. All
purchases were made on credit. Cash sales were 1/3rd of credit sales.

Q20. A & B carrying on partnership business. Their position as on 31st March 2005, 2004& 2003 is as follows:

(i) Balance sheets as at 31st March :

(Rs. in lacs)
Assets 2005 2004 2003
Fixed Assets (at cost less Depreciation) 30.00 25.00 24.00
Investment 2.00 1.00 2.00
Stock in Trade 12.00 10.00 8.00
Accounts Receivable 18.00 15.00 12.00
Loans & Advances 8.00 8.00 6.00
Cash & Bank Balances 1.00 1.00 1.00
71.00 60.00 53.00
Liabilities
Partners' Capital Accounts 35.00 30.00 25.00
Partner's Current Accounts 6.00 4.00 4.00
Bank Loans 8.00 6.00 6.00
Sundry Creditors 22.00 20.00 18.00
71.00 60.00 53.00

(ii) Summarized Income Statements for the year ended 31st March :
(Rs. in lacs)
Particulars 2005 2004 2003
Net Sales 240.00 220.00 200.00
Less : Cost of Sales 180.00 170.00 150.00
Gross Margin 60.00 50.00 50.00
Less : Operating Expenses 50.00 40.00 36.00
Net Profit before Tax 10.00 10.00 14.00
 

Prepare Trend Analysis Statement taking earliest year as the base. Writing Balance Sheet in vertical
form suitable for analysis in Trend Statement is necessary.

Q21. While preparing the financial statements for the year ended 31-3-2005 of XYZ Ltd., it was discovered that a
substantial portion of the records were missing. However, the accountant was able to gather the following data: 16

Liabilities Rs. Rs. Assets Rs. Rs.

Paid-up Share Capital Land 3,60,000
SYBMS( MANAGEMENT ACCOUNTING) Page 19
60,000 Equity shares of Rs. 10 6,00,000 Plant and Machinery:
each) Cost 9,00,000
Reserves and Surplus: (-) Depreciation 3,60,000 5,40,000
Balance on 1-4-04 1,80,000 Current Assets:
+ Transfer during the year 1,20,000 3,00,000 Stock ?
10% Loan 6,00,000 Debtors ?
Current Liabilities: Cash and Bank ?
Proposed Dividend ?
Provision for Tax ?
Creditors ? 6,00,000
Total ? Total ?

The following other information is available:

 
Current Ratio 2:1
Cash and Bank 30% of Total Current Assets
Debtors Turnover (Sales/Debtors) 12 Times
Stock Turnover (Cost of Goods Sold/Stock) 12 Times
Creditors Turnover (Cost of goods Sold/Creditors) 12 Times
Gross Profit Ratio on Sales 25%
Proposed Dividend 20%

You are required to complete the Balance Sheet as on 31-03-2005 with available information, working
notes shall form part of your answer.

Q22. From the following Balance Sheet, prepare Vertical balance sheet which is suitable for analysis and calculate Trend
Percentages taking 2003 as base year and comment on it.  

Balance Sheets as at 31st

December
2005 2004 2003
Particular
Rs. Rs. Rs.
Share Capital 50,000 50,000 50,000
Reserve and Surplus 5,000 10,000 10,000
Secured Loan 3,00 5,000 5,000
Unsecured Loan 2,000 - 6,000
Current liabilities 5,000 5,000 4,000
65,000 70,000 75,000
2005 2004 2003
Particular Rs. Rs. Rs.
Fixed Assets (Net) 40,000 45,000 50,000
Investment 5,000 7,500 10,000
Stock 7,000 6,000 5,000
Debtors 10,000 9,000 7,000

SYBMS( MANAGEMENT ACCOUNTING) Page 20

 Cash 3,000 2,500 3,000
65,000 70,000 75,000

Q23 From the information giver, below prepare Balance sheet in a vertical form, suitable for analysis and
calculate the following ratios:

1. Capital Gearing Ratio.

2. Proprietary Ratio.
3. Current Ratio.
4. Liquid Ratio.
5. Stock of Working Capital.

(Rs.) (Rs.)
Cash at Bank 12,500 Land and Building 2,00,000
Expenses paid in Advance 15,500 Stock 68,250
Creditors 1,01,500 Debtors 1,30,750
Bills Receivable 5,250 Plant and Machinery 1,36,000
12% Debentures 62,500 Loan from Director 1,00,000
Equity Share Capital 2,50,000 (Repayable after three years)
P & L A/c (Cr.) 54,250

Q24 The following is financial information of ZN Ltd. for 3 years ended on 31st December every year.
2005 2006 2007
Particulars
Rs. Rs. Rs.
Share Capital 1,50,000 1,80,000 1,90,000
Gross profit 3,50,000 3,50,000 4,00,000
Current liabilities 40,000 ? ?
Fixed Assets 2,40,000 2,50,000 2,35,000
Long Term Loan 1,00,000 ? 1,20,000
Cost of Goods Sold ? 4,00,000 3,00,000
Working Capital 60,000 4,50,000 1,40,000
Net Worth 2,00,000 2,20,000 2,55,000
Current Assets ? 1,20,000 2,00,000
Sales 5,50,000 7,50,000 ?
Capital Employed 3,00,000 ? ?
Reserve and Surplus ? 40,000 65,000

You are required to prepare vertical Trend Financial Statement taking 2005 as the Base.

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