Example:
Prepare Comparative Balance Sheet of company ABC with the help of current year
and previous year balance sheet.Find out the % increase or decrease in shareholders fund,current assets and current liabilities.
Balance Sheet as on December 2010
Liabilities
|
2010
|
2009
|
Assets
|
2010
|
2009
|
Share
Capital
|
3,00,000
|
2,00,000
|
Land
|
6,00,000
|
5,80,000
|
6%
preference share
|
70,000
|
1,00,000
|
Building
|
1,38,000
|
2,20,000
|
12%
Debenture
|
4,60,000
|
5,00,000
|
Patent,trademark
|
2,50,000
|
1,00,000
|
Reserve
and surplus
|
1,00,000
|
80,000
|
Machinery
|
80,000
|
70,000
|
Long term
loan
|
1,10,000
|
1,00,000
|
Marketable securities
|
58,000
|
40,000
|
Creditors
|
50,000
|
40,000
|
Debtors
|
65,000
|
68,000
|
Outstanding
expenses
|
6,000
|
10,000
|
Stock
|
50,000
|
42,000
|
Bills
payable
|
15,000
|
12,000
|
Prepaid expense
|
30,000
|
35,000
|
Overdraft
|
14,000
|
10,000
|
Cash
|
9,000
|
7,000
|
Provision
for tax
|
70,000
|
45,000
|
|||
Provision
for debt
|
65,000
|
50,000
|
|||
Proposed
dividend
|
20,000
|
15,000
|
|||
12,80,000
|
11,62,000
|
12,80,000
|
11,62,000
|
Solution:
Particulars
|
2009
|
2010
|
Increase or decrease
|
% increase or decrease
|
Fixed Assets:
|
||||
Land
|
5,80,000
|
6,00,000
|
20,000
|
3.45
|
Building
|
2,20,000
|
1,38,000
|
-82,000
|
-37.27
|
Patent,Trademark
|
1,00,000
|
2,50,000
|
1,50,000
|
150
|
Machinery
|
70,000
|
80,000
|
10,000
|
14.29
|
Total (A)
|
9,70,000
|
10,68,000
|
98,000
|
10.10
|
Investment (B)
|
-----
|
-----
|
----
|
-----
|
Working Capital (C):
|
||||
Current Assets:
|
||||
Debtors
|
68,000
|
65,000
|
-3000
|
-4.41
|
Stock
|
42,000
|
50,000
|
8,000
|
19.05
|
Prepaid
expense
|
35,000
|
30,000
|
-5,000
|
-14.29
|
Marketable
Securities
|
40,000
|
58,000
|
18,000
|
45
|
Cash
|
7,000
|
9,000
|
2,000
|
28.57
|
Total (D)
|
1,92,000
|
2,12,000
|
20,000
|
10.41
|
Current liabilities:
|
||||
Creditors
|
40,000
|
50,000
|
10,000
|
25
|
Bills
payable
|
12,000
|
15,000
|
3,000
|
25
|
Outstanding
expenses
|
10,000
|
6,000
|
-4,000
|
-40
|
Overdraft
|
10,000
|
14,000
|
4,000
|
40
|
Provision
for tax
|
45,000
|
70,000
|
25,000
|
55.55
|
Proposed
dividend
|
15,000
|
20,000
|
5000
|
33.33
|
Provision
for debt
|
50,000
|
65,000
|
15,000
|
30
|
Total (E)
|
1,82,000
|
2,40,000
|
58,000
|
31.87
|
Working Capital: (C = D-E)
|
10,000
|
-28,000
|
-38000
|
-380
|
Capital Employed (A+B+C)
|
9,80,000
|
10,40,000
|
60,000
|
6.12
|
Less: Long
term debt:
|
||||
Debenture
|
5,00,000
|
4,60,000
|
-40,000
|
8
|
Loan
|
1,00,000
|
1,10,000
|
10,000
|
10
|
Shareholders fund
|
3,80,000
|
4,70,000
|
90,000
|
23.68
|
Represented by-Share capital
|
2,00,000
|
3,00,000
|
1,00,000
|
50
|
6%
preference share
|
1,00,000
|
70,000
|
-30,000
|
30
|
Reserve
and surplus
|
80,000
|
1,00,000
|
20,000
|
25
|
Interpretation:
·
There is 23% increase in shareholders fund.
·
6% increase in
capital employed in a company that include fixed assets,investments and working
capital.
·
The current
liabilities is around 21%more than current assets in comparison to previous
year data.
Example: Prepare Comparative income statement of company X Ltd. with the help of following information:
Particulars
|
2008
|
2009
|
Gross
sales
|
3,20,000
|
4,26,300
|
Sales
return
|
1,10,200
|
90,000
|
Cost of
goods sold
|
50,000
|
40,000
|
Office
expense
|
36,000
|
43,000
|
Selling
and distribution expenses
|
30,000
|
59,200
|
Commission
received
|
10,000
|
13,200
|
Dividend received
|
8,000
|
11,000
|
Salary
|
18,000
|
26,000
|
Tax
|
30%
|
30%
|
Solution:
Particulars
|
2008
|
2009
|
Increase or decrease
|
% Increase or decrease
|
Gross
sales
|
3,20,000
|
4,26,300
|
1,06,300
|
33.22
|
Less: Sales return
|
1,10,200
|
90,000
|
-20,200
|
18.33
|
Net sales
|
2,09,800
|
3,36,300
|
1,26,500
|
60.30
|
Less: Cost of goods sold
|
50,000
|
40,000
|
-10,000
|
20
|
Gross profit
|
1,59,800
|
2,96,300
|
1,36,500
|
85.42
|
Less: Operating expenses:
|
||||
Office
expense
|
36,000
|
43,000
|
7,000
|
19.44
|
Selling
and distribution expenses
|
30,000
|
59,200
|
29,200
|
97.33
|
Salary
|
18,000
|
26,000
|
8,000
|
44.44
|
Total
|
84,000
|
1,28,200
|
44,200
|
52.62
|
Add: Operating income
|
||||
Commission
received
|
10,000
|
13,200
|
3,200
|
32
|
Dividend
received
|
8,000
|
11,000
|
3,000
|
37.5
|
Total
|
18,000
|
24,200
|
6,200
|
34.44
|
Net profit before tax
|
93,800
|
1,92,300
|
98,500
|
105.01
|
Less: Tax @ 30%
|
28,140
|
57,690
|
29,550
|
150.01
|
Net profit after tax
|
65,660
|
1,34,610
|
68,950
|
105.01
|
Interpretation:
·
The net profit
after tax increases by Rs.68,950. It means net profit increases by 105% from
previous year.
·
The gross profit
increases by 85% from previous year.
·
It also shows
that tax payment does not affect more in company’s earnings.
·
The rate of operating
expenses is more in comparison to previous year.i.e. operating expenses is
52%.
·
The rate of
operating income is also increases but not as much higher than the rate of operating
expenses.
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