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Convert the following Income Statement into Common Size Statement and interpret the changes in 2011 in the light of the conditions in 2010. Particulars2010 (Rs)2011 (Rs)Gross Sales30,60036,720(-) Return(600)(700)Net Sales¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯36,020(-) Cost of Goods Sold(18,200)––––––––––(20,250)––––––––––Gross Profit 11,800–––––––––– 15,770––––––––––(-) Operating ExpensesAdministration Expenses(3,000)(3,400)Sales Expenses(6,000)(6,600)Total Expenses¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 9,000––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 10,000–––––––––Income from operations2,8005,770(+)Non -operating Income300400Total Income¯¯¯¯¯¯¯¯¯¯¯¯¯3,100¯¯¯¯¯¯¯¯¯¯¯¯¯6,170(-) Non -opearating Expenses(400)(600)Net Profit2,700––––––––––––5,570–––––––––––– |
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Answer» Convert the following Income Statement into Common Size Statement and interpret the changes in 2011 in the light of the conditions in 2010. Particulars2010 (Rs)2011 (Rs)Gross Sales30,60036,720(-) Return(600)(700)Net Sales¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯30,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯36,020(-) Cost of Goods Sold(18,200)––––––––––(20,250)––––––––––Gross Profit 11,800–––––––––– 15,770––––––––––(-) Operating ExpensesAdministration Expenses(3,000)(3,400)Sales Expenses(6,000)(6,600)Total Expenses¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 9,000––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 10,000–––––––––Income from operations2,8005,770(+)Non -operating Income300400Total Income¯¯¯¯¯¯¯¯¯¯¯¯¯3,100¯¯¯¯¯¯¯¯¯¯¯¯¯6,170(-) Non -opearating Expenses(400)(600)Net Profit2,700––––––––––––5,570–––––––––––– |
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