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Numerical Questions Solutions
1. Following are the balance sheets of Alpha Ltd., as at March 31, 2016 and 2017. You are required to prepare Comparative Balance Sheet
Particulars
March 31, 2016
(₹)
(₹)
March 31, 2017
(₹)
(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital
2,00,000
4,00,000
(b) Reserve & Surplus
1,00,000
1,50,000
2. Noncurrent Liabilities
(a) Long Term Borrowings
2,00,000
3,00,000
3.Current Liabilities
(a) Short term borrowings
50,000
70,000
(b) Trade Payables
30,000
60,000
(c) Other Current Liabilities
20,000
10,000
(d) Short Terms Provisions
20,000
20,000 30,000
Total
6,20,000
10,20,000
II. Assets
1. Non-Current Assets
(a) Fixed Assets
2,00,000
5,00,000
(b) Non-Current Investments
1,00,000
1,25,000
2. Current Assets
(a) Current Investments
60,000
80,000
(b) Inventories
1,35,000
1,55,000
(c) Trade Receivables
60,000
90,000
(d) Cash and Cash Equivalents
25,000
10,000
(e) Short term Loans & Advances
40,000
60,000
Total
6,20,000
10,20,000
Comparative Balance Sheet of Alpha Ltd., as at March 31, 2016 and March 31, 2017
Particulars
March 31, 2016
(₹)
(₹)
March 31, 2017
(₹)
(₹)
Absolute Change
Percentage Change
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital
2,00,000
4,00,000
2,00,000
100
(b) Reserve & Surplus
1,00,000
1,50,000
50,000
50
2. Noncurrent Liabilities
(a) Long Term Borrowings
2,00,000
3,00,000
1,00,000
50
3.Current Liabilities
(a) Short term borrowings
50,000
70,000
20,000
40
(b) Trade Payables
30,000
60,000
30,000
100
(c) Other Current Liabilities
20,000
10,000
(10,000)
(50)
(d) Short Terms Provisions
20,000
30,000
10,000
50
Total
6,20,000
10,20,000
4,00,000
64.52
II. Assets
1. Non-Current Assets
(a) Fixed Assets
2,00,000
5,00,000
3,00,000
150
(b) Non-Current Investments
1,00,000
1,25,000
25,000
25
2. Current Assets
(a) Current Investments
60,000
80,000
20,000
33.33
(b) Inventories
1,35,000
1,55,000
20,000
14.81
(c) Trade Receivables
60,000
90,000
30,000
50
(d) Cash and Cash Equivalents
25,000
10,000
(15,000)
(60)
(e) Short term Loans & Advances
40,000
60,000
20,000
50
Total
6,20,000
10,20,000
4,00,000
64.52
Note: In the text book, the short term provisions as on March 31, 2017 is given in the problem as 20,000. It is changed to 30,000 so that it matches with the total (otherwise, the total will be just ₹ 10,10,000 and not ₹ 10,20,000) and also the balance sheet is balanced.
2. Following are the Balance Sheets of Beta Ltd., as at March 31, 2016 and
2017.
2017.
Particulars
March 31, 2016
(₹)
(₹)
March 31, 2017
(₹)
(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital
4,00,000
3,00,000
(b) Reserve & Surplus
1,50,000
1,00,000
2. Noncurrent Liabilities
(a) Long Term IDBI
3,00,000
1,00,000
3.Current Liabilities
(a) Short term borrowings
70,000
50,000
(b) Trade Payables
60,000
30,000
(c) Other Current Liabilities
1,10,000
1,00,000
(d) Short Terms Provisions
10,000
20,000
Total
11,00,000
7,00,000
II. Assets
1. Non-Current Assets
(a) Fixed Assets
4,00,000
2,20,000
(b) Non-Current Investments
2,25,000
1,00,000
2. Current Assets
(a) Current Investments
80,000
60,000
(b) Inventories
1,05,000
90,000
(c) Trade Receivables
90,000
60,000
(d) Cash and Cash Equivalents
1,00,000
85,000
(e) Short term Loans & Advances
1,00,000
85,000
Total
11,00,000
7,00,000
Prepare comparative Balance Sheet.
Balance Sheet of Beta Ltd. as at March 31, 2016 and March 31, 2016
Particulars
March 31, 2016
(₹)
(₹)
March 31, 2017
(₹)
(₹)
Absolute Change
Percentage Change
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital
4,00,000
3,00,000
(1,00,000)
(25)
(b) Reserve & Surplus
1,50,000
1,00,000
(50,000)
(33.33)
2. Noncurrent Liabilities
(a) Long Term IDBI
3,00,000
1,00,000
(2,00,000)
(66.67)
3.Current Liabilities
(a) Short term borrowings
70,000
50,000
(20,000)
(28.57)
(b) Trade Payables
60,000
30,000
(30,000)
(50)
(c) Other Current Liabilities
1,10,000
1,00,000
(10,000)
(9.09)
(d) Short Terms Provisions
10,000
20,000
10,000
100
Total
11,00,000
7,00,000
(4,00,000)
(36.36)
II. Assets
1. Non-Current Assets
(a) Fixed Assets
4,00,000
2,20,000
(1,80,000)
(45)
(b) Non-Current Investments
2,25,000
1,00,000
(1,25,000)
(55.56)
2. Current Assets
(a) Current Investments
80,000
60,000
(20,000)
(25)
(b) Inventories
1,05,000
90,000
(15,000)
(14.29)
(c) Trade Receivables
90,000
60,000
(30,000)
(33.33)
(d) Cash and Cash Equivalents
1,00,000
85,000
(15,000)
(15)
(e) Short term Loans & Advances
1,00,000
85,000
(15,000)
(15)
Total
11,00,000
7,00,000
(4,00,000)
(36.36)
3. Prepare Comparative Statement of profit and loss from the following information.
Particulars
2015-16
(₹)
(₹)
2016-17
(₹)
(₹)
Freight Outward
20,000
10,000
Wages (office)
10,000
5,000
Manufacturing Expenses
50,000
20,000
Stock adjustment
(60,000)
30,000
Cash purchases
80,000
60,000
Credit purchases
60,000
20,000
Return inward
8,000
4,000
Gross profit
(30,000)
90,000
Carriage outward
20,000
10,000
Machinery
3,00,000
2,00,000
10% depreciation on machinery
10,000
5,000
Interest on short-term loans
20,000
20,000
10% debentures
20,000
10,000
Profit on sale of furniture
20,000
10,000
Loss on sale of office car
90,000
60,000
Tax rate
40%
50%
Comparative Statement of Profit and Loss as at 2015-16 and 2016-17
Particulars
Note
No.
No.
2015-16
(₹)
(₹)
2016-17
(₹)
(₹)
Absolute Change
(₹)
(₹)
Percentage Change
(%)
(%)
I. Revenue from Operations
92,000
2,16,000
1,24,000
134.78
II. Other Income
20,000
10,000
(10,000)
{(50)}
III. Total Revenue (I + II)
1,12,000
2,26,000
1,14,000
101.79
IV. Expenses
Purchases of Stock-in-Trade
1,40,000
80,000
(60,000)
(42.86)
Changes in inventories of finished goods
(60,000)
30,000
90,000
(150)
Employee Benefits expense
10,000
5,000
(5,000)
(50)
Finance Costs
22,000
21,000
(1,000)
(4.55)
Depreciation and Amortisation Expenses
10,000
5,000
(5,000)
(50)
Other Expenses
1,30,000
80,000
(50,000)
(38.46)
Total Expenses
2,52,000
2,21,000
(31,000)
(12.30)
V. Profit Before Tax (III – IV)
(1,40,000)
5,000
1,45,000
(103.57)
VI. Tax Expense
—
2,500
2,500
—
VII. Profit after Tax
(1,40,000)
2,500
1,42,500
(101.79)
Working Notes:
Revenue from Operations/Net Sales: The revenue from operations/Net Sales is not directly given. So, we need to calculate it as below.
Total Purchases
=
Cash Purchases + Credit Purchases
Total Purchases (in 2015-16)
=
₹ 80,000 + ₹ 60,000
=
₹ 1,40,000
Total Purchases (in 2016-17)
=
₹ 60,000 + ₹ 20,000
=
₹ 80,000
Net Sales
=
Total Purchases + Manufacturing Expenses + Change in Inventory + Gross Profit – Sales Return
Net Sales (in 2015-16)
=
₹ 1,40,000 + ₹ 50,000 – ₹ 60,000 – ₹ 30,000 – ₹ 8,000
=
₹ 92,000
Net Sales (in 2016-17)
=
₹ 80,000 + ₹ 20,000 + ₹ 30,000 + ₹ 90,000 – ₹ 4,000
=
₹ 2,16,000
Finance Cost:
Finance Cost
=
Interest on Short-term loans + Interest on 10% Debentures
Finance Cost (in 2015-16)
=
{₹~20,000 + ₹~20,000 × \dfrac{10}{100}}
=
₹ 20,000 + 2,000
=
₹ 22,000
Finance Cost (in 2016-17)
=
{₹~20,000 + ₹~10,000 × \dfrac{10}{100}}
=
₹ 20,000 + 1,000
=
₹ 21,000
Other Expenses:
Other Expenses
=
Freight Outward + Carriage outward + Loss on sale of office car
Other Expenses (in 2015-16)
=
₹ 20,000 + ₹ 20,000 + ₹ 90,000
=
₹ 1,30,000
Other Expenses (in 2016-17)
=
₹ 10,000 + ₹ 10,000 + ₹ 60,000
=
₹ 80,000
4. Prepare Comparative Statement of Profit and Loss from the following information:
Particulars
2015-16
(₹)
(₹)
2016-17
(₹)
(₹)
Manufacturing expenses
35,000
80,000
Opening stock
30,000
60% of closing stock
Sales
9,60,000
4,50,000
Returns outward
4,000
(out of credit purchase)
(out of credit purchase)
6,000
(out of cash purchase)
(out of cash purchase)
Closing stock
150% of opening stock
1,00,000
Credit purchases
1,50,000
150% of cash purchase
Cash purchases
80% of credit purchases
40,000
Carriage outward
10,000
30,000
Building
1,00,000
2,00,000
Depreciation on building
20%
10%
Interest on bank overdraft
5,000
–
10% debentures
2,00,000
20,00,000 2,00,000
Profit on sale of copyright
10,000
20,000
Loss on sale of personal car
10,000
20,000
Other operating expenses
20,000
10,000
Tax rate
50%
40%
Note: The interest on 10% debentures for the year 2016-17 is given as ₹ 20,00,000. As the interest on debentures will be almost the same as previous year, we considered this as ₹ 2,00,000 (₹ 20,00,000 is a typo in the text book)
Particulars
Note
No.
No.
2015-16
(₹)
(₹)
2016-17
(₹)
(₹)
Absolute Change
(₹)
(₹)
Percentage Change
(%)
(%)
I. Revenue from Operations
9,60,000
4,50,000
(5,10,000)
53.13
II. Other Income
10,000
20,000
10,000
100
III. Total Revenue (I + II)
9,70,000
4,70,000
(5,00,000)
(51.55)
IV. Expenses
Purchases of Stock-in-Trade
2,66,000
94,000
(1,72,000)
(64.7)
Change in Inventories
(15,000)
(40,000)
(25,000)
166.7
Finance Costs
25,000
20,000
(5,000)
(20)
Depreciation and Amortisation Expenses
20,000
20,000
0
0
Other Expenses
30,000
40,000
10,000
33.33
Total Expenses
3,26,000
1,34,000
(1,92,000)
(58.90)
V. Profit before Tax (III – IV)
6,44,000
3,36,000
(3,08,000)
(47.83)
VI. Tax Expense
3,22,000
1,34,400
(1,87,600)
(58.26)
VII. Profit After Tax
3,22,000
2,01,600
(1,20,400)
(37.39)
Working Notes:
Net Purchases:
Net Purchases of Stock-in-Trade
=
Cash Purchases + Credit Purchases – Purchases Returns
In 2015-16
=
₹ 1,20,000 + ₹ 1,50,000 – ₹ 4,000
=
₹ 2,66,000
In 2016-17
=
₹ 40,000 + ₹ 60,000 – ₹ 6,000
=
₹ 94,000
Change in Inventories:
Change in Inventory
=
Opening Stock – Closing Stock
In 2015-16
=
₹ 30,000 – ₹ 45,000
=
(₹ 15,000)
In 2016-17
=
₹ 60,000 – ₹ 1,00,000
=
(₹ 40,000)
Finance Cost:
Finance Cost
=
Interest on Bank Overdraft + Interest on Debentures
In 2015-16
=
₹ 5,000 + ₹ 20,000
=
₹ 25,000
In 2016-17
=
0 + ₹ 20,000
=
₹ 20,000
Other Expenses:
Other Expenses
=
Carriage Outward + Other operating expenses
In 2015-16
=
₹ 10,000 + ₹ 20,000
=
₹ 30,000
In 2016-17
=
₹ 30,000 + ₹ 10,000
=
₹ 40,000
5. Prepare a Common size statement of profit and loss of Shefali Ltd. with the help of following information:
Particulars
2015-16
(₹)
(₹)
2016-17
(₹)
(₹)
Revenue from operations
6,00,000
8,00,000
Indirect expense
25% of gross profit
25% of gross profit
Cost of revenue from operations
4,28,000
7,28,000
Other incomes
10,000
12,000
Income tax
30%
30%
Common Size Statement of Profit and Loss of Shefali Ltd. for the years 2016-16 and 2016-17
Particulars
Absolute Amounts
Percentage of Total Assets
March 31, 2016
(₹)
(₹)
March 31, 2017
(₹)
(₹)
March 31, 2016
(%)
(%)
March 31, 2017
(%)
(%)
I. Revenue from Operations
6,00,000
8,00,000
100
100
II. Other Income
10,000
12,000
1.67
1.5
III. Total Revenue (I + II)
6,10,000
8,12,000
101.67
101.5
IV. Expenses
Cost of revenue from operations
4,28,000
7,28,000
71.33
91
Other Expenses
43,000
18,000
7.17
2.25
Total Expenses
4,71,000
7,46,000
78.5
93.25
V Profit Before Tax (III – IV)
1,39,000
66,000
23.17
8.25
VI Tax Expense
41,700
19,800
6.95
2.48
VII Profit after Tax
97,300
46,200
16.22
5.78
Working Notes:
Gross Profit:
Gross Profit
=
Revenue from Operations – Cost of revenue from operations
In 2015-16
=
₹ 6,00,000 – ₹ 4,28,000
=
₹ 1,72,000
In 2016-17
=
₹ 8,00,000 – ₹ 7,28,000
=
₹ 72,000
Other Expenses:
Other Expenses
=
Indirect Expenses
=
% of Gross Profit
In 2015-16
=
25% of ₹ 1,72,000
=
{₹~1,72,000 × \dfrac{25}{100}}
=
₹ 43,000
In 2016-17
=
25% of ₹ 72,000
=
{₹~72,000 × \dfrac{25}{100}}
=
₹ 18,000
6. Prepare a Common Size balance sheet from the following balance sheet of Aditya Ltd., and Anjali Ltd.:
Particulars
Aditya Ltd.
(₹)
(₹)
Anjali Ltd.
(₹)
(₹)
I. Equity and Liabilities
1. Shareholder’s Funds
a) Equity share capital
6,00,000
8,00,000
b) Reserves and surplus
3,00,000
2,50,000
2. Current liabilities
1,00,000
1,50,000
Total
10,00,000
12,00,000
II. Assets
1. Non current assets
a) Fixed assets
4,00,000
7,00,000
2. Current assets
6,00,000
5,00,000
Total
1,00,0000 10,00,000
12,00,000
Note: In the text book, the current assets value for Aditya Ltd. has a typo with the placement of comma separator in the number. Please note the correction.
Common Size Statement of Profit and Loss of Shefali Ltd. for the years 2016-16 and 2016-17
Particulars
Absolute Amounts
Percentage of Total Assets
Aditya Ltd.
(₹)
(₹)
Anjali Ltd.
(₹)
(₹)
Aditya Ltd.
(%)
(%)
Anjali Ltd.
(%)
(%)
I. Equity and Liabilities
1. Shareholder’s Funds
a) Equity share capital
6,00,000
8,00,000
60
66.67
b) Reserves and surplus
3,00,000
2,50,000
30
20.83
2. Current liabilities
1,00,000
1,50,000
10
12.5
Total
10,00,000
12,00,000
100
100
II. Assets
1. Non current assets
a) Fixed assets
4,00,000
7,00,000
40
58.33
2. Current assets
6,00,000
5,00,000
60
41.67
Total
10,00,000
12,00,000
100
100