Chapter 3 – Tools of Financial statement analysis

Page No 3.29:

Question 1: From the following information, prepare Comparative Balance Sheet of Sunrise ta.

Particulars	31st March, 2020 (₹)	31st March, 2021 (₹)
Shareholders’ Funds	15,00,000	22,50,000
Non-current Liabilities	7,50,000	7,50,000
Current Liabilities	2,50,000	7,50,000
Non-current Assets	17,50,000	26,25,000
Current Assets	7,50,000	11,25,000

Answer:

Comparative Balance sheet as at 31st March, 2021
Particulars	Note No.	31st March, 2020 (₹)	31st March, 2021 ₹(₹)	Absolute Change (Increase/Decrease)(₹)	Percentage Change (Increase/Decrease)(%)
		(A)	(B)	(C = A-B)	(D = C/A×100)
I.                    Equity and Liabilities
1.      Shareholders’ Funds		15,00,000	22,50,000	7,50,000	50.00
2.      Non-current Current		7,50,000	7,50,000	. . .	. . .
3.      Current liabilities		2,50,000	7,50,000	5,00,000	200.00
Total		25,00,000	37,50,000	12,50,000	50
II.                 Assets
1.      Non-current Assets		17,50,000	26,25,000	8,75,000	50.00
2.      Current Assets		7,50,000	11,25,000	3,75,000	50.00
Total		25,00,000	37,50,000	12,50,000	50

     

Page No 3.30:

Question 2:

From the following Balance Sheet, prepare Comparative Balance Sheet of Sun Ltd.:

Particulars	Note No.	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. EQUITY AND LIABILITIES 1. Shareholder’s Funds
(a) Share Capital		3,50,000	3,00,000
2. Non-Current Liabilities
Long-term Borrowings		1,00,000	2,00,000
3. Current Liabilities :
Trade Payables		1,50,000	1,00,000
Total		6,00,000	6,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets (Tangible)		4,00,000	3,00,000
2. Current Assets
Trade Receivables		2,00,000	3,00,000
Total		6,00,000	6,00,000

Answer:

In the books of Sun Ltd. Comparative Balance Sheet as at March 31, 2018 and 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	3,00,000	3,50,000	50,000	16.67
Shareholders’ Fund	3,00,000	3,50,000	50,000	16.67
2. Non-Current Liabilities
a. Long-term Borrowings	2,00,000	1,00,000	(1,00,000)	(50.00)
3. Current Liabilities
a. Trade Payables	1,00,000	1,50,000	50,000	50.00
Total	6,00,000	6,00,000	–	–
II. Assets
1. Non-Current Assets
a. Fixed Assets (Tangible)	3,00,000	4,00,000	1,00,000	33.33
2. Current Assets
a. Trade Receivables	3,00,000	2,00,000	(1,00,000)	(33.33)
Total	6,00,000	6,00,000	–	–

   

Page No 3.30:

Question 3:

Following is the Balance Sheet of Radha Ltd. as at 31st March, 2019:

Particulars	Note No.	31st March, 2019, ( ₹)	31st March, 2018, ( ₹)
I. EQUITY AND LIABILITIES 1. Shareholders’ Funds
(a) Share Capital		15,00,000	10,00,000
(b) Reserves and Surplus		10,00,000	10,00,000
2. Non-Current Liabilities
Long-term Borrowings		8,00,000	2,00,000
3. Current Liabilities
(a) Trade Payables		5,00,000	3,00,000
Total		38,00,000	25,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets		25,00,000	15,00,000
(ii) Intangible Assets		5,00,000	5,00,000
2. Current Assets
(a) Trade Receivables		6,00,000	3,50,000
(b) Cash and Cash Equivalents		2,00,000	1,50,000
Total		38,00,000	25,00,000

You are required to prepare Comparative  Balance Sheet on the basis of the information given in the above Balance Sheet. Answer:

In the books of Radha Ltd. Comparative Balance Sheet as at March 31, 2018 and 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Equity Share Capital	10,00,000	15,00,000	5,00,000	50.00
b. Reserve and Surplus	10,00,000	10,00,000	–	–
Shareholders’ Fund	20,00,000	25,00,000	5,00,000	25.00
2. Non-Current Liabilities
a. Long-term Borrowings	2,00,000	8,00,000	6,00,000	300.00
3. Current Liabilities	3,00,000	5,00,000	2,00,000	66.67
Total	25,00,000	38,00,000	13,00,000	52.00
II. Assets
1. Non-Current Assets
a. Fixed Assets (Tangible)	15,00,000	25,00,000	10,00,000	66.67
b. Intangible Assets	5,00,000	5,00,000	–	–
	20,00,000	30,00,000	10,00,000	50.00
2. Current Assets
a. Trade Receivables	3,50,000	6,00,000	2,50,000	71.43
b. Cash and Cash Equivalents	1,50,000	2,00,000	50,000	33.33
	5,00,000	8,00,000	3,00,000	60.00
Total	25,00,000	38,00,000	13,00,000	52.00

     

Page No 3.31:

Question 4:

Balance Sheet of Blue Bell Ltd. as at 31st March, 2019 is given below: BALANCE SHEET as at 31st March, 2019
Particulars	Note No.	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. EQUITY AND LIABILITIES 1. Shareholder’s Funds
(a) Share Capital		3,26,000	2,44,000
(b) Reserves and Surplus		1,00,000	1,00,000
2. Non-Current Liabilities
Long-term Borrowings		6,96,000	4,38,000
3. Current Liabilities
Trade Payables		2,98,000	78,000
Total		14,20,000	8,60,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets		5,68,000	4,30,000
(b) Non-Current Investments		6,000	4,000
2. Current Assets
(a) Trade Receivables		6,46,000	3,76,000
(b) Cash and Cash Equivalents		2,00,000	50,000
Total		14,20,000	8,60,000

Prepare Comparative Balance Sheet showing percentage changes from 2018 to 2019. Answer:

In the books of Blue Bell Ltd. Comparative Balance Sheet as at March 31, 2018 and 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Equity Share Capital	2,44,000	3,26,000	82,000	33.61
b. Reserves and Surplus	1,00,000	1,00,000	–	–
Shareholder’s Funds	3,44,000	4,26,000	82,000	23.84
2. Non-Current Liabilities
a. Long-term Borrowings	4,38,000	6,96,000	2,58,000	58.90
3. Current Liabilities	78,000	2,98,000	2,20,000	282.05
Total	8,60,000	14,20,000	5,60,000	65.12
II. Assets
1. Non-Current Assets
a. Fixed Assets (Tangible)	4,30,000	5,68,000	1,38,000	32.09
b. Non-Current Investments	4,000	6,000	2,000	50.00
	4,34,000	5,74,000	1,40,000	32.26
2. Current Assets
a. Trade Receivables	3,76,000	6,46,000	2,70,000	71.81
b. Cash and Cash Equivalents	50,000	2,00,000	1,50,000	300.00
	4,26,000	8,46,000	4,20,000	98.59
Total	8,60,000	14,20,000	5,60,000	65.12

  Page No 3.31: Question 5: Following is the summarised Balance Sheet of Wye Ltd. as at 31st March, 2019:

Particulars	Note No.	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital:
(i) Equity Share Capital		4,00,000	4,00,000
(ii) Preference Share Capital		1,00,000	1,00,000
(b) Reserves and Surplus		1,20,000	1,10,000
2. Non-Current Liabilities
(a) Long-term Borrowings	1.	4,50,000	4,50,000
(b) Long-term Provisions		50,000	1,00,000
3. Current Liabilities
(a) Trade Payables (Creditors)		5,30,000	3,30,000
(b) Short-term Provisions		50,000	50,000
Total		17,00,000	15,40,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible)		9,90,000	10,40,000
(b) Non-Current Investments		1,00,000	1,00,000
2. Current Assets
(a) Trade Receivables		5,00,000	3,00,000
(b) Cash and Cash Equivalents	2	1,10,000	1,00,000
Total		17,00,000	15,40,000

Notes to Accounts

Particulars	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. Long-term Borrowings
Bank Loan	3,50,000	4,50,000
8% Debentures	1,00,000	…
	4,50,000	4,50,000
2. Cash and Cash Equivalents
Bank Balance	1,00,000	90,000
Cash in Hand	10,000	10,000
	1,10,000	1,00,000

You are required to comment upon the changes in absolute figures from one period to another. Answer:

In the books of Wye Ltd. Comparative Balance Sheet as at March 31, 2018 and 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Comments
I. Equity and Liabilities
1. Shareholders’ Funds
a. Equity Share Capital	4,00,000	4,00,000	–	No Change
b. Preference Share Capital	1,00,000	1,00,000	–	No Change
ii. Reserve and Surplus	1,10,000	1,20,000	10,000	Increase
Shareholders’ Fund	6,10,000	6,20,000	10,000
2. Non-Current Liabilities
a. Long-term Borrowings
Bank Loan	4,50,000	3,50,000	1,00,000	Decrease
8% Debentures	–	1,00,000	1,00,000	Increase
b. Long-Term Provision	1,00,000	50,000	50,000	Decrease
3. Current Liabilities
a. Trade Payables	3,30,000	5,30,000	2,00,000	Increase
b. Short-Term Provisions	50,000	50,000	–	No Change
Total	15,40,000	17,00,000	1,60,000
II. Assets
1. Non-Current Assets
a. Fixed Assets (Tangible)	10,40,000	9,90,000	50,000	Decrease
b. Non-Current Investments	1,00,000	1,00,000	–	No Change
2. Current Assets
b. Trade Receivables	3,00,000	5,00,000	2,00,000	Increase
c. Cash and Cash Equivalents	1,00,000	1,10,000	10,000	Increase
Total	15,40,000	17,00,000	1,60,000

      Page No 3.32: Question 6: From the Following Balance Sheet of Royal Industries Ltd. as at 31st March, 2019, prepare Comparative Balance Sheet:

Particulars	Note No.	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. EQUITY AND LIABILITIES 1. Shareholder’s Funds
(a) Share Capital
Equity Share Capital		10,00,000	5,00,000
(b) Reserves and Surplus		1,00,000	1,00,000
2. Non-Current Liabilities
Long-term Borrowings		2,00,000	3,00,000
3. Current Liabilities
Trade Payables		2,00,000	1,00,000
Total		15,00,000	10,00,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets		8,00,000	4,00,000
(ii) Intangible Assets		2,00,000	2,00,000
(b) Non-Current Investments		2,00,000	2,00,000
2. Current Assets
(a) Inventories		2,50,000	1,50,000
(b) Cash and Cash Equivalents		50,000	50,000
Total		15,00,000	10,00,000

Answer:

In the books of Royal Industries Ltd. Comparative Balance Sheet as at March 31, 2018 and 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Equity Share Capital	5,00,000	10,00,000	5,00,000	100.00
b. Reserve and Surplus	1,00,000	1,00,000	–	–
Shareholders’ Fund	6,00,000	11,00,000	5,00,000	83.33
2. Non-Current Liabilities
a. Long-term Borrowings	3,00,000	2,00,000	(1,00,000)	(33.33)
3. Current Liabilities
a. Trade Payables	1,00,000	2,00,000	1,00,000	100.00
Total	10,00,000	15,00,000	5,00,000	50.00
II. Assets
1. Non-Current Assets
a. Fixed Assets (Tangible)	4,00,000	8,00,000	4,00,000	100.00
b. Intangible Assets	2,00,000	2,00,000	–	–
c. Non-Current Investments	2,00,000	2,00,000	–	–
2. Current Assets
a. Inventories	1,50,000	2,50,000	1,00,000	66.67
b. Cash and Cash Equivalents	50,000	50,000
	2,00,000	3,00,000	1,00,000	50.00
Total	10,00,000	15,00,000	5,00,000	50.00

    Page No 3.33: Question 7: From the following Balance Sheet of H.P. Ltd. as at 31st March, 2019, prepare Comparative Balance Sheet:

Particulars	Note No.	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital:
(i) Equity Share Capital		12,50,000	5,00,000
(ii) Preference Share Capital		2,50,000	2,50,000
(b) Reserves and Surplus		3,00,000	4,50,000
2. Non-Current Liabilities
Long-term Borrowings: 12% Debentures		9,50,000	5,50,000
Loan from Directors		2,50,000	2,00,000
3. Current Liabilities
(a)Short-term Borrowings		3,50,000	1,75,000
(b) Trade Payables		2,00,000	1,00,000
(c) Short-term Provisions		50,000	25,000
Total		36,00,000	22,50,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible)		22,50,000	15,00,000
2. Current Assets
(a) Inventories		4,50,000	2,50,000
(b) Trade Receivables		8,00,000	4,50,000
(c) Cash and Cash Equivalents		1,00,000	50,000
Total		36,00,000	22,50,000

  Answer:

Comparative Balance Sheet of H.P. Ltd. as at March 31, 2018  and March 31, 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
1. Equity Share Capital	12,50,000	5,00,000	7,50,000	150.00
2. Preference Share Capital	2,50,000	2,50,000	–	–
Total	15,00,000	7,50,000	7,50,000	100.00
b. Reserve and Surplus	3,00,000	4,50,000	(1,50,000)	(33.33)
	18,00,000	12,00,000	6,00,000	50.00
2. Non-Current Liabilities
a. Long-term Borrowings
12% Secured Debentures	9,50,000	5,50,000	4,00,000	72.73
12% Unsecured Debentures	2,50,000	2,00,000	50,000	25.00
	12,00,000	7,50,000	4,50,000	60.00
3. Current Liabilities
a. Short-Term Borrowings	3,50,000	1,75,000	1,75,000	100.0
b. Trade Payables	2,00,000	1,00,000	1,00,000	100.00
c. Short-Term Provisions	50,000	25,000	25,000	100.00
Total	36,00,000	22,50,000	13,50,000	60.00
II. Assets
1. Non-Current Assets
a. Fixed Assets (Tangible)	22,50,000	15,00,000	7,50,000	50.00
2. Current Assets
a. Inventories	4,50,000	2,50,000	2,00,000	80.00
b. Trade Receivables	8,00,000	4,50,000	3,50,000	77.78
c. Cash and Cash Equivalents	1,00,000	50,000	50,000	100.00
Total	36,00,000	22,50,000	13,50,000	60.00

    Page No 3.33: Question 8: Prepare Comparative Statement of Profit and Loss from the following information:

Particulars	31st March, 2020 (₹)	31st March, 2019 (₹)
Revenue from Operations	30,00,000	20,00,000
Other Income	3,60,000	4,00,000
Expenses	21,00,000	12,00,000

    Answer:

Comparative Statement of Profit and Loss as at 31st March, 2021
Particulars	Note No.	31st March, 2020 (₹)	31st March, 2021 ₹(₹)	Absolute Change (Increase/Decrease)(₹)	Percentage Change (Increase/Decrease)(%)
		(A)	(B)	(C = A-B)	(D = C/A×100)
Revenue from Operations		30,00,000	20,00,000	10,00,000	50.00
Other Income		3,60,000	4,00,000	(40,000)	(10.00)
Total Revenue (I+II)		33,60,000	24,00,000	9,60,000	40.00
Expenses		21,00,000	12,00,000	9,00,000	75.00
Profit before Tax		12,60,000	12,00,000	60,000	5.00

  Page No 3.33: Question 9: From the following Statement of Profit and Loss of Skills India Ltd. for the year ended 31st March, 2018 and 2019, prepare a Comparative Statement of Profit and Loss:

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
Revenue from Operations	45,00,000	20,00,000
Employee Benefit Expenses	10,00,000	8,00,000
Other Expenses	5,00,000	2,00,000
Tax Rate 30%

(CBSE 2020)   Answer:

Comparative Statement of Profit and Loss as at 31st March, 2019
Particulars	Note No.	31st March, 2018 (₹)	31st March, 2019(₹)	Absolute Change (Increase/Decrease)(₹)	Percentage Change (Increase/Decrease)(%)
		(A)	(B)	(C = A-B)	(D = C/A×100)
Revenue from Operations		20,00,000	45,00,000	25,00,000	125
Employee Benefit Expenses		8,00,000	10,00,000	2,00,000	25
Other Expenses		2,00,000	5,00,000	3,00,000	150
Total Expenses		10,00,000	15,00,000	5,00,000	50
Profit before Tax		10,00,000	30,00,000	20,00,000	200
Less: Tax 30%		3,00,000	9,00,000	6,00,000	200
Profit after Tax		7,00,000	21,00,000	14,00,000	200

      Page No 3.33: Question 10: Following information is extracted from the Statement of Profit and Loss of Gold Coin Ltd. for the year ended 31st March, 2015:  

Particulars	31st March, 2015	31st March, 2014
Revenue from Operations	₹ 60,00,000	₹ 45,00,000
Employee Benefit Expenses	₹ 30,00,000	₹ 22,50,000
Depreciation	₹ 7,50,000	₹ 6,00,000
Other Expenses	₹ 15,50,000	₹ 10,00,000
Tax Rate	30%	30%

  Answer:

Comparative Income Statement for the year ended March 31, 2014 and 2015
Particulars	2014 (Rs)	2015 (Rs)	Absolute Change (Rs)	Percentage Change (%)
I. Revenue from Operations	45,00,000	60,00,000	15,00,000	33.33
II. Expenses
a. Depreciation	6,00,000	7,50,000	1,50,000	25.0
b. Employees Benefit Expenses	22,50,000	30,00,000	7,50,000	33.33
c. Other Expenses	10,00,000	15,50,000	5,50,000	55.0
	38,50,000	53,00,000	14,50,000	37.66
Profit before Income Tax	6,50,000	7,00,000	50,000	7.69
Less: Income Tax	1,95,000	2,10,000	15,000	7.69
Profit after Income Tax	4,55,000	4,90,000	35,000	7.69

      Page No 3.34: Question 11: Prepare Comparative Statement of Profit and Loss from the following Statement of Profit and Loss:

Particulars	Note No.	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. Income
Revenue from Operations (Net Sales)		3,50,000	3,00,000
II. Expenses
Purchases of Stock-in-Trade		2,10,000	1,80,000
Change in Inventories of Stock-in-Trade		15,000	20,000
Employees Benefits Expenses		17,500	15,000
Other Expenses		7,500	5,000
Total		2,50,000	2,20,000
III. Profit before Tax (I-II)		1,00,000	80,000
IV. Less: Tax		30,000	24,000
V. Profit after Tax (III-IV)		70,000	56,000

  Answer:

Comparative Income Statement for the year ended March 31, 2018 and 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Revenue from Operations	3,00,000	3,50,000	50,000	16.67
II. Expenses
a. Purchase of Stock-in-Trade	1,80,000	2,10,000	30,000	16.67
b. Changes in Inventories of Stock-in-Trade	20,000	15,000	(5,000)	(25.00)
c. Employees Benefit cost	15,000	17,500	2,500	16.67
d. Other Expenses	5,000	7,500	2,500	50.00
	2,20,000	2,50,000	30,000	13.67
Profit before Income Tax (I-II)	80,000	1,00,000	20,000	25.00
Less: Income Tax	24,000	30,000	6,000	25.00
Profit after Income Tax	56,000	70,000	14,000	25.00

    Page No 3.34: Question 12: Prepare a Comparative Income Statement of Bikul Ltd. with the help of the following information:

Particulars	2016-17 (₹)	2017-18 (₹)
Revenue from Operations	10,00,000	16,00,000
Cost of Materials Consumed	5,00,000	10,00,000
Employee Benefit Expenses	80,000	40,000
Other Indirect Expenses	60,000	80,000
Income Tax Rate 40%.

(CBSE 2019)         Answer:

Comparative Statement of Profit and Loss as at 31st March, 2018
Particulars	Note No.	31st March, 2017 (₹)	31st March, 2018(₹)	Absolute Change (Increase/Decrease)(₹)	Percentage Change (Increase/Decrease)(%)
		(A)	(B)	(C = A-B)	(D = C/A×100)
Revenue from Operations		10,00,000	16,00,000	6,00,000	60.00
Expenses
Cost of Materials Consumed		5,00,000	10,00,000	5,00,000	100.00
Employee Benefit Expenses		80,000	40,000	(40,000)	(50.00)
Other Indirect Expenses		60,000	80,000	20,000	33.33
Total Expenses		6,40,000	11,20,000	4,80,000	75.00
Profit before Tax		3,60,000	4,80,000	1,20,000	33.33
Less: Tax 40%		1,44,000	1,92,000	48,000	33.33
Profit after Tax		2,16,000	2,88,000	72,000	33.33

  Page No 3.35: Question 13: Prepare Comparative Statement of Profit and Loss from the following information:

Particulars	31st March, 2019	31st March, 2018
Revenue from Operations	₹ 37,50,000	₹ 25,00,000
Other Income	₹ 4,50,000	₹ 5,00,000
Cost of Materials Consumed	₹ 22,50,000	₹ 12,50,000
Other Expenses	₹ 3,75,000	₹ 2,50,000
Tax Rate	50%	50%

  Answer:

Comparative Income Statement for the year ended March 31, 2018 and 2019
Particulars	March 31, 2018 ( ₹)	March 31, 2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Revenue from operations	25,00,000	37,50,000	12,50,000	50.00
II. Other Income	5,00,000	4,50,000	(50,000)	(10.00)
III. Total Revenue (I + II)	30,00,000	42,00,000	12,00,000	40.00
IV. Expenses
a. Cost of Materials Consumed	12,50,000	22,50,000	10,00,000	80.00
b. Other Expenses	2,50,000	3,75,000	1,25,000	50.00
	15,00,000	26,25,000	11,25,000	75.00
Profit before Income Tax	15,00,000	15,75,000	75,000	5.00
Less: Income Tax @ 50%	7,50,000	7,87,500	37,500	5.00
Profit after Income Tax	7,50,000	7,87,500	37,500	5.00

    Page No 3.34: Question 14: Prepare a Comparative Statement of Profit and Loss from the information extracted from the Statement of Profit and Loss for the year ended 31st March, 2017 and 2018.

Particulars	2017-18 (₹)	2016-17 (₹)
Revenue from Operations	15,00,000	10,00,000
Other Income (% of Revenue from Operations)	60%	50%
Employee Benefit Expenses (% of total revenue)	40%	30%
Tax Rate	40%	40%

    Answer:

Comparative Statement of Profit and Loss as at 31st March, 2018
Particulars	Note No.	31st March, 2017 (₹)	31st March, 2018 (₹)	Absolute Change (Increase/Decrease)(₹)	Percentage Change (Increase/Decrease)(%)
		(A)	(B)	(C = A-B)	(D = C/A×100)
Revenue from Operations		10,00,000	15,00,000	5,00,000	50.00
Other Income (% of Revenue from Operations)		5,00,000	9,00,000	4,00,000	80.00
Total Revenue		15,00,000	24,00,000	9,00,000	60.00
Employee Benefit Expenses (% of total revenue)		4,50,000	9,60,000	5,10,000	113.33
Profit before Tax		10,50,000	14,40,000	3,90,000	37.14
Less: Tax 40%		4,20,000	5,76,000	1,56,000	37.14
Profit after Tax		6,30,000	8,64,000	2,34,000	37.14

      Page No 3.35: Question 15: From the following information, prepare Comparative Statement of Profit and Loss showing increase, decrease and percentage:

Particulars	31st March, 2019	31st March, 2018
Cost of Materials Consumed	₹ 13,44,000	₹ 6,00,000
Revenue from Operations (% of Materials Consumed)	125%	200%
Other Expenses (% of Operating Revenue)	10%	10%
Tax Rate	50%	50%

  Answer:

Comparative Income Statement for the year ended 31st March, 2018 and 2019
Particulars	March 31, 2018 ( ₹)	March 31, 2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Revenue from Operations (WN1)	12,00,000	16,80,000	4,80,000	40.00
II. Expenses
a. Cost of Material Consumed	6,00,000	13,44,000	7,44,000	124.00
b. Other Expenses (WN2)	1,20,000	1,68,000	48,000	40.00
	7,20,000	15,12,000	7,92,000	110.00
Profit before Income Tax (I-II)	4,80,000	1,68,000	(3,12,000)	(65.00)
Less: Income Tax @ 50%	2,40,000	84,000	(1,56,000)	(65.00)
Profit after Income Tax	2,40,000	84,000	1,56,000	(65.00)

Working Notes: WN1 Computation of Revenue from Operations

Particulars	2018 ( ₹)	2019 ( ₹)
Cost of Materials Consumed	6,00,000	13,44,000
% of Materials Consumed	200%	125%
Revenue from Operations	12,00,000	16,80,000

  WN2 Computation of Other Expenses

Particulars	2018 ( ₹)	2019 ( ₹)
Revenue From Operations	12,00,000	16,80,000
% of Operating Revenue	10%	10%
Other Expenses	1,20,000	1,68,000

      Page No 3.35: Question 16: From the following particulars obtained from the books of Mark, prepare a Comparative Statement of Profit and Loss:

Particulars	31st March, 2018 (₹)	31st March, 2017 (₹)
Revenue from Operations	50,00,000	40,00,000
Purchase of Stock-in-Trade	40,00,000	30,00,000
Changes in Inventory	10,00,000	8,00,000
Other Expenses	5,00,000	4,00,000
Other Incomes	2,50,000	2,00,000

  Answer:

Comparative Statement of Profit and Loss as at 31st March, 2018
Particulars	Note No.	31st March, 2017 (₹)	31st March, 2018 (₹)	Absolute Change (Increase/Decrease)(₹)	Percentage Change (Increase/Decrease)(%)
		(A)	(B)	(C = A-B)	(D = C/A×100)
Revenue from Operations		40,00,000	50,00,000	10,00,000	25
Other Incomes		2,00,000	2,50,000	50,000	25
Total Revenue		42,00,000	52,50,000	10,50,000	25
Expenses
Purchase of Stock-in-Trade		30,00,000	40,00,000	10,00,000	33.3
Changes in Inventory		8,00,000	10,00,000	2,00,000	25
Other Expenses		4,00,000	5,00,000	13,00,000	25
Total Expenses		42,00,000	55,00,000	13,00,000	30.95
Profit before Tax		. . .	(2,50,000)	(2,50,000)	…
Less: Tax … %		. . .	. . .	. . .	…
Profit after Tax		42,00,000	55,00,000	13,00,000	30.95

  Page No 3.36: Question 17: From the following information, prepare Comparative Statement of Profit and Loss

Particulars	31st March, 2021 (₹)	31st March, 2020 (₹)
Revenue from Operations	20,00,000	16,00,000
Other Income	4,40,000	3,00,000
Cost of Materials Consumed	8,00,000	6,00,000
Changes in Inventories of Finished Goods and Work-in-Progress	4,00,000	2,00,000
Other Expenses (% of Cost of Revenue from Operations)	15%	10%
Tax Rate	30%	30%

  Answer:

Comparative Statement of Profit and Loss as at 31st March, 2021
Particulars	Note No.	31st March, 2020 (₹)	31st March, 2021 (₹)	Absolute Change (Increase/Decrease)(₹)	Percentage Change (Increase/Decrease)(%)
		(A)	(B)	(C = A-B)	(D = C/A×100)
Revenue from Operations		16,00,000	20,00,000	4,00,000	25
Other Incomes		3,00,000	4,40,000	1,40,000	46.67
Total Revenue		19,00,000	24,40,000	5,40,000
Expenses
Cost of Materials Consumed		6,00,000	8,00,000	2,00,000	33.33
Changes in Inventories of Finished Goods and Work-in-Progress		2,00,000	4,00,000	2,00,000	100
Other Expenses (% of Cost of Revenue from Operations)		80,000	1,80,000	1,00,000	125
Total Expenses		8,80,000	13,80,000	5,00,000	56.82
Profit before Tax		10,20,000	10,60,000	40,000	3.92
Less: Tax 30%		3,06,000	3,18,000	12,000	3.92
Profit after Tax		7,14,000	7,42,000	28,000	3.92

  Working Note: Calculation of cost of material Consumed and Other Expenses

Items	2020	2021
Cost of Materials Consumed	6,00,000	8,00,000
Changes in Inventories of Finished Goods and Work-in-Progress	2,00,000	4,00,000
Cost of Revenue from Operations	8,00,000	12,00,000
Other Expenses (2020: 10% and 2021:15% of Cost of Revenue from Operations)	80,000	1,80,000

      Page No 3.35: Question 18: From the following Statement of Profit and Loss, prepare Comparative Statement of Profit and Loss:

Particulars	Note No.	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. Income
Revenue from Operations (Net Sales)		50,00,000	40,00,000
II. Expenses
Purchases of Stock-in-Trade		34,00,000	28,50,000
Change in Inventories of Stock-in-Trade	1	1,00,000	1,50,000
Employees Benefits Expenses		1,00,000	1,00,000
Other Expenses	2	2,00,000	1,50,000
Total		38,00,000	32,50,000
III. Net Profit (I-II)		12,00,000	7,50,000

Notes to Accounts

Particulars	31st March, 2019 ( ₹)	31st March, 2018 ( ₹)
I. Change in Inventory of stock-in-Trade
Opening Inventory	2,00,000	3,50,000
Less: Closing Inventory	1,00,000	2,00,000
	1,00,000	1,50,000
2. Other Expenses
Administrative Expenses	50,000	50,000
Selling and Distribution Expenses	1,50,000	1,00,000
	2,00,000	1,50,000

  Answer:  

Comparative Income Statement for the year ended March 31, 2018 and 2019
Particulars	2018 ( ₹)	2019 ( ₹)	Absolute Change ( ₹)	Percentage Change (%)
I. Revenue from Operations	40,00,000	50,00,000	10,00,000	25.00
II. Expenses:
a. Purchases of Stock-in-Trade	28,50,000	34,00,000	5,50,000	19.30
b. Changes in Inventories of Stock-in-Trade	1,50,000	1,00,000	(50,000)	(33.33)
c. Employees Benefit Expenses	1,00,000	1,00,000	–	–
d. Other Expenses	1,50,000	2,00,000	50,000	33.33
	32,50,000	38,00,000	5,50,000	16.92
Profit before Income Tax (I-II)	7,50,000	12,00,000	4,50,000	60.00
Less: Income Tax	–	–	–	–
Profit after Income Tax	7,50,000	12,00,000	4,50,000	60.00

      Page No 3.36: Question 19: From the following Statement of Profit and Loss of Star Ltd., for the years ended 31st March, 401N and 2016, prepare a Common-size statement:

Particulars	2015-16	2014-15
Revenue from Operations	25,00,000	20,00,000
Employee Benefit Expenses	10,00,00o	7,00,000
Other Expenses	2,00,000	3,00,000
Tax rate	40%	40%

    Answer:  

Common-Size Statement of Profit and Loss as at 31st March, 2016
Particulars	Note No.	Absolute Amounts		Percentage of Revenue from Operation (Net Sales)
		31st March, 2015 (₹)	31st March, 2016 (₹)	% 31st March, 2015 (₹)	% 31st March, 2016 (₹)
Revenue from Operations		20,00,000	25,00,000	100	100
Expenses
Employee Benefit Expenses		7,00,000	10,00,00o	35	40
Other Expenses		3,00,000	2,00,000	15	8
Total Expenses		10,00,000	12,00,000	50	48
Profit before Tax		10,00,000	13,00,000	50	52
Less: Tax 40%		4,00,000	5,20,000	20	20.80
Profit after Tax		6,00,000	7,80,000	30	31.20

      Page No 3.36: Question 20: Prepare Common-size Statement of Profit and Loss from the following Statement of Profit and Loss:

Particulars	Note No.	31st March, 2021 (₹)
I. Income
Revenue from Operations		15,00,000
Other Income		60,000
Total Revenue		15,60,000
II. Expenses
Purchases of Stock-in-Trade		7,50,000
Change in Inventories of Stock-in-Trade		50,000
Other Expenses		2,10,000
Total		10,10,000
III. Profit before Tax (I-II)		5,50,000

    Answer:  

Common-Size Statement of Profit and Loss as at 31st March, 2021
Particulars	Note No.	Absolute Amounts	Percentage of Revenue from Operation (Net Sales)
		31st March, 2021 (₹)	% 31st March, 2021 (₹)
I. Income
Revenue from Operations		15,00,000	100
Other Income		60,000	4
Total Revenue		15,60,000	104
II. Expenses
Purchases of Stock-in-Trade		7,50,000	50
Change in Inventories of Stock-in-Trade		50,000	3.33
Other Expenses		2,10,000	14
Total Expenses		10,10,000	67.33
III. Profit before Tax (I-II)		5,50,000	36.63

  Page No 3.37: Question 21: Prepare Common-size Statement of Profit and Loss from the following Statement of Profit and Loss:

Particulars	Note No.	Year I ( ₹)	Year II ( ₹)
I. Income
Revenue from Operations (Net Sales)		14,00,000	16,00,000
II. Expenses
Purchases of Stock-in-Trade		9,00,000	10,00,000
Change in Inventories of Stock-in-Trade		1,00,000	1,80,000
Finance Costs		80,000	80,000
Other Expenses		90,000	1,30,000
Total		11,70,000	13,90,000
III. Net Profit (I-II)		2,30,000	2,10,000
IV.  Less: Tax		40,000	36,000
V. Net Profit After Tax (III-IV)		1,90,000	1,74,000

  Answer:  

Common Size Income Statement for the year ended…..
Particulars	Absolute Amount (Rs)		Percentage of Revenue (%)
	Year 1	Year II	Year 1	Year II
I. Revenue from Operations	14,00,000	16,00,000	100.00	100.00
II. Expenses
a. Purchases of Stock-in-Trade	9,00,000	10,00,000	64.28	62.5
b. Change in Inventories of Stock-in-Trade	1,00,000	1,80,000	7.14	11.25
c. Finance Cost	80,000	80,000	5.71	5.00
d. Other Expenses	90,000	1,30,000	6.43	8.12
Profit before Income Tax	2,30,000	2,10,000	16.43	13.13
Less: Income Tax	40,000	36,000	2.84	2.25
Profit after Income Tax	1,90,000	1,74,000	13.57	10.88

      Page No 3.37: Question 22: Prepare a Common-size Statement of Profit and Loss of Hari Darshan Ltd’ from the following information:

Particulars	Note No.	2018-19 (₹)	2017-18 (₹)
Revenue from Operations		20,00,000	10,00,000
Purchase of Stock-in-Trade		7,70,000	4,20,000
Changes in Inventories		1,20,000	80,000
Other Expenses		52,000	30,000
Other Incomes		60,000	50,000
Tax Rate 50%

      Answer:  

Common-Size Statement of Profit and Loss as at 31st March, 2019
Particulars	Note No.	Absolute Amounts		Percentage of Revenue from Operation (Net Sales)
		31st March, 2018 (₹)	31st March, 2019 (₹)	% 31st March, 2018 (₹)	% 31st March, 2019 (₹)
Revenue from Operations		10,00,000	20,00,000	100	100
Other Incomes		50,000	60,000	5	3
Total Revenue		10,50,000	20,60,000	105	103
Expenses
Purchase of Stock-in-Trade		4,20,000	7,70,000	42	38.5
Changes in Inventories		80,000	1,20,000	8	6
Other Expenses		30,000	52,000	3	2.6
Total Expenses		5,30,000	9,42,000	53	47.1
Profit before Tax		5,20,000	11,18,000	52	55.9
Less: Tax 50%		2,60,000	5,59,000	26	27.95
Profit after Tax		2,60,000	5,59,000	26	27.95

      Page No 3.37: Question 23: Prepare Common-size Statement of Profit and Loss from the following information:

Particulars	31st March, 2021 (₹)	March, 2020 (₹)
Revenue from Operations	25,00,000	20,00,000
Other Income	1,00,000	50,000
Cost of Materials Consumed	15,00,000	10,00,000
Employees Benefit Expenses	3,00,000	2,00,000
Other Expenses	4,50,000	3,50,000

Additional Information: Other expenses include Provision for Tax of ₹2,00,000 for the year ending 31st March, 2020 and  ₹2,50,000 for the year ending 31st March, 2021.   Answer:

Common-Size Statement of Profit and Loss as at 31st March, 2021
Particulars	Note No.	Absolute Amounts		Percentage of Revenue from Operation (Net Sales)
		31st March, 2020 (₹)	31st March, 2021 (₹)	% 31st March, 2020 (₹)	% 31st March, 2021 (₹)
Revenue from Operations		20,00,000	25,00,000	100	100
Other Income		50,000	1,00,000	2.5	4
Total Revenue		20,50,000	26,00,000	102.5	104
Expenses
Cost of Materials Consumed		10,00,000	15,00,000	50	60
Employees Benefit Expenses		2,00,000	3,00,000	10	12
Other Expenses		1,50,000	2,00,000	7.5	8
Total Expenses		13,50,000	20,00,000	67.5	80
Profit before Tax		7,00,000	6,00,000	35	24
Less: Tax		2,00,000	2,50,000	10	10
Profit after Tax		5,00,000	3,50,000	25	14

Note: Other expenses are after debiting Provision for Tax.       Page No 3.38: Question 24: From the following information, prepare a Common-size Balance Sheet:

Particulars	31st March, 2021 (₹)	31st March, 2020 (₹)
Shareholders’ Funds	5,40,000	3,60,000
Non-current Liabilities	1,80,000	1,80,000
Current Liabilities	1,80,000	60,000
Non-current Assets	6,30,000	4,20,000
Current Assets	2,70,000	1,80,000

  Answer:

Common-Size Statement of Balance Sheet as at 31st March, 2021
Particulars	Note No.	Absolute Amounts		Percentage of Revenue from Operation (Net Sales)
		31st March, 2020 (₹)	31st March, 2021 (₹)	% 31st March, 2020 (₹)	% 31st March, 2021                    (₹)
I.Equity and Liabilities
Shareholders’ Funds		3,60,000	5,40,000	60	60
Non-current Liabilities		1,80,000	1,80,000	30	20
Current Liabilities		60,000	1,80,000	10	20
Total		6,00,000	9,00,000	100	100
II.Assets
Non-current Assets		4,20,000	6,30,000	70	70
Current Assets		1,80,000	2,70,000	30	30
Total		6,00,000	9,00,000	100	100

  Page No 3.38: Question 25: Prepare Common-size Balance Sheet and comment on the financial position of Sun Ltd. and Star Ltd. The Balance Sheet of Sun Ltd. and Star Ltd. as at 31st March, 2019 are:

Particulars	Sun Ltd. ( ₹)	Star Ltd. ( ₹)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital	9,00,000	12,00,000
(b) Reserves and Surplus	4,00,000	3,50,000
2. Current Liabilities
Trade Payables (Creditors)	2,00,000	2,50,000
Total	15,00,000	18,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets (Tangible)	10,00,000	16,00,000
2. Current Assets
Trade Receivables (Debtors)	5,00,000	2,00,000
Total	15,00,000	18,00,000

  Answer:

Common Size Balance Sheet as at March 31, 2019
Particulars	Absolute Amount (₹)		Percentage of Balance Sheet Total (%)
	Sun Ltd.	Star Ltd.	Sun Ltd.	Star Ltd.
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	9,00,000	12,00,000	60.00	66.67
b. Reserve and Surplus	4,00,000	3,50,000	26.67	19.44
2. Current Liabilities
a. Trade Payables	2,00,000	2,50,000	13.33	13.89
Total	15,00,000	18,00,000	100.00	100.00
II. Assets
1. Non-Current Assets
a. Fixed Assets	10,00,000	16,00,000	66.67	88.89
2. Current Assets
a. Trade Receivables	5,00,000	2,00,000	33.33	11.11
Total	15,00,000	18,00,000	100.00	100.00

Comments:

1. Star Ltd. has a greater share of Capital in the total sources of funds i.e. 66.67% in comparison to 60% of Sun Ltd.
2. Sun Ltd. retains 26.67% of their earnings as a part of Reserves and Surplus. Whereas, Star Ltd. retains only 19.44% of their earnings.
3. Star Ltd. has invested major portion of its funds on acquiring the Fixed Assets as these are 88.89% of the total application of funds in comparison to 66.67% of Sun Ltd. On the other hand, Sun Ltd. emphasizes more on Current Assets as these are 33.33% of the total applications of funds in comparison to 11.11% of Star Ltd.

    Page No 3.38: Question 26: From the following information, prepare a Common-size Balance Sheet:

BALANCE SHEET as at 31st March, 2021
Particulars	Note No.	March, 31st 2021 (₹)	31st March, 2020 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital		32,00,000	18,00,000
(b) Reserves and Surplus		8,00,000	6,00,000
2. Non-Current Liabilities
Long-term Borrowings		16,00,000	12,00,000
3. Current Liabilities
Short-term Borrowings		8,00,000	12,00,000
Total		64,00,000	48,00,000
Il. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipment (Fixed Assets):
Tangible Assets		18,00,000	16,00,000
(b) Non-current Investments		8,00,000	6,00,000
2. Current Assets
(a) Inventories		10,00,000	8,00,000
(b) Trade Receivables		16,00,000	12,00,000
(c) Cash and Cash Equivalents		12,00,000	6,00,000
Total		64,00,000	48,00,000

  Answer:

Common-Size Statement of Balance Sheet as at 31st March, 2021
Particulars	Note No.	Absolute Amounts		Percentage of Revenue from Operation (Net Sales)
		31st March, 2020 (₹)	31st March, 2021 (₹)	% 31st March, 2020 (₹)	% 31st March, 2021 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital		18,00,000	32,00,000	37.5	50
(b) Reserves and Surplus		6,00,000	8,00,000	12.5	12.5
2. Non-Current Liabilities
Long-term Borrowings		12,00,000	16,00,000	25	25
3. Current Liabilities
Short-term Borrowings		12,00,000	8,00,000	25	12.5
Total		48,00,000	64,00,000	100	100
Il. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipment (Fixed Assets):
Tangible Assets		16,00,000	18,00,000	33.33	28.13
(b) Non-current Investments		6,00,000	8,00,000	12.5	12.5
2. Current Assets
(a) Inventories		8,00,000	10,00,000	16.67	15.62
(b) Trade Receivables		12,00,000	16,00,000	25	25
(c) Cash and Cash Equivalents		6,00,000	12,00,000	12.5	18.75
Total		48,00,000	64,00,000	100	100