IV. Total Expenses 2,72,000 3,40,000 68,000 25 V. Profit Before Tax (III-IV) VI. Tax expenses: 1,36,000 2,04,000 68,000 50 Current Tax (50% and 60%) 1,36,000 1,36,000 --- --- VII. Profit After Tax (V-VI) Cost of Revenue from Operations Note No. 1:- - 60% of Sales 2013- 8,00,000 x 60/100 = 4,80,000 2014 10,00,000 x 60/100 = 6,00,000 – Employees Benefit Expenses Cost of Revenue from Operations Note No.2 :- - 10% of As per note No.1- 2013 4,80,000 x10/100 = 48,000 – 2014 6,00,000 x 10/100= 60,000 – Value involved: Decision making, Comprehension and Analytical bent of mind. Conclusion: In spite increase in revenue by 25%, there is no change in profit, because expenses have increased by 25% 3) Preparation of Common Size Statement: 2012 Q.1. What are Common Size statements? (2011) Ans:- Common Size statements express all items of financial statements as a percentage of some common base such as revenue from operations for profit & loss statement and totals of balance sheet for balance sheet. Q.2. Raj Ltd decided to bear the higher education cost of five brilliant students belonging to the weaker section of the society. Following is the Statements of Profit & Loss of Raj Ltd for the year ended 31-3-2011. Particulars Amount (Rs.) Income: Revenue from Operations 2,00,000 Other Income 15,000 Total Revenue 2,15,000 Expenses: Cost of Materials Consumed 1,10,000 Other Expenses 5,000 Total Expenses 1,15,000 Tax 40,000 You are required to: Prepare a common size Statement of Profit & Loss of Raj Ltd for the year ended 31.3.2011. Identify the value involved. (CBSE 2012) Solution:-
IV. Total Expenses V. Profit Before Tax (III-IV) VI. Tax expenses: Current Tax (50% and 60%) VII. Profit After Tax (V-VI) 2,72,000 1,36,000 1,36,000 3,40,000 2,04,000 1,36,000 68,000 68,000 --- 25 50 --- Note No. 1:- Cost of Revenue from Operations - 60% of Sales 2013- 8,00,000 x 60/100 = 4,80,000 2014 – 10,00,000 x 60/100 = 6,00,000 Note No.2 :- Employees Benefit Expenses - 10% of Cost of Revenue from Operations As per note No.1- 2013 – 4,80,000 x10/100 = 48,000 2014 – 6,00,000 x 10/100= 60,000 Value involved: Decision making, Comprehension and Analytical bent of mind. Conclusion: In spite increase in revenue by 25%, there is no change in profit, because expenses have increased by 25% 3) Preparation of Common Size Statement: 2012 Q.1. What are Common Size statements? (2011) Ans:- Common Size statements express all items of financial statements as a percentage of some common base such as revenue from operations for profit & loss statement and totals of balance sheet for balance sheet. Q.2. Raj Ltd decided to bear the higher education cost of five brilliant students belonging to the weaker section of the society. Following is the Statements of Profit & Loss of Raj Ltd for the year ended 31-3-2011. Particulars Amount (Rs.) Income: Revenue from Operations Other Income Total Revenue Expenses: Cost of Materials Consumed Other Expenses Total Expenses Tax 2,00,000 15,000 2,15,000 1,10,000 5,000 1,15,000 40,000 You are required to: Prepare a common size Statement of Profit & Loss of Raj Ltd for the year ended 31.3.2011. Identify the value involved. (CBSE 2012) Solution:-
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