1.

Convert the following Income Statement into Common Size Statement and interpret the changes in 2005 in the light of the conditions in 2004. 2004Rs2005RsGross Sales30,60036,720Less : Returns600700Net Sales30,00036,020Less : Cost of Goods Sold18,20020,250Gross Profit11,80015,770Less : Operating Expenses Administration Expenses3,0003,400Sales Expenses6,0006,600Total Expenses9,00010,000Income from Operations2,8005,770Add : Non-operating Income300400Total Income3,1006,170Less : Non-operating Expenses400600Net Profit2,7005,570

Answer»



Convert the following Income Statement into Common Size Statement and interpret the changes in 2005 in the light of the conditions in 2004.


































































































2004



Rs



2005



Rs



Gross Sales



30,600



36,720



Less : Returns



600



700



Net Sales



30,000



36,020



Less : Cost of Goods Sold



18,200



20,250



Gross Profit



11,800



15,770



Less : Operating Expenses







Administration Expenses



3,000



3,400



Sales Expenses



6,000



6,600



Total Expenses



9,000



10,000



Income from Operations



2,800



5,770



Add : Non-operating Income



300



400



Total Income



3,100



6,170



Less : Non-operating Expenses



400



600



Net Profit



2,700



5,570









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