Work sheet to Balance sheet questions. Questio n No: 1 Details required What is Net Sales. Net Sales.

Answers Net Sale = Gross Sale less Excise Duty. Gross Sales Rs 2400.00 (Includes Export sales) Less Excise Duty Rs 400.00 --------------Net Sales Rs 2000.00 Cost of Production = Raw material Consumption +Opening stock of Semi Finished Goods Closing stock of Semi finished goods + Manufacturing Expenses. Cost of Production = Rs 960+ 60 -120+240.00 == Rs1140.00 Cost of Production +Opening Stock of Finished Goods Closing stock of Finished goods. Cost of Sales = 1140+120-60 = Rs 1200. Net Sales Cost of Sales Rs2000 1200 = Rs800 Gross profit - Selling and Administrative Expenses - Interest Rs800 200 200 = Rs400. Operating profit + other Income other Expenses Tax Rs400 + 50 -- 80 170 = Rs200 Net profit after Tax + Depreciation Rs200 + 60 = Rs260 Net Profit after Tax Dividend Rs200 -- 100 = Rs100 Retained profit + Depreciation Rs100 + 60 = Rs160

Cost of Production

Cost of Production. 3 Cost of Sales Cost of sales Gross Profit Gross Profit Operating Profit after Interest Operating Profit after Interest Net profit after tax Net profit after Tax Cash Generated Cash Generated Retained Profit Retained Profit Net Cash Accrual Net Cash accrual

4 5

6 7 8 9

Additional questions. Sl No 1 Details required Gross Profit Ratio Gross Profit Ratio 2 Operating Profit Answers Gross Profit ----------------------- X100 Net Sales Rs800 -------- X 100 = 40% Rs2000 Operating Profit after Interest

Ratio Operating Profit 3 Net Profit Ratio Net Profit Ratio

--------------------------- X100 Net Sales 400 --------- X100 = 20% 2000 Net Profit after Tax ------------------------ X100 Net Sales 200 --------- X100 =10% 2000 Questions -2

Additional Sl No 1 Details Holding Period of Raw Materials

Answer Stock of Raw Material closing stock --------------------------------------------- X12* Raw material consumption *(To finding holding in months)

Holding Period of Raw Materials 2 Holding period of Work in progress. Holding period of Work in progress. 3 Holding Period of Finished Goods Holding Period of Finished Goods 4 Debtors velocity Debtors Velocity

160 ------ X12 = 2 Months 960 Closing Stock of work in progress ----------------------------------------- X12 Cost of Production 95 ----- X12 =1 month 1140 Closing stock of Finished goods -------------------------------------X12 Cost of sales 200 ----- X12 =2 Months 1200 Outstanding Debtors ---------------------------- X12 Credit sales 300 ------ X12 + 1.5 Months ( Gross sales is taken as credit sales) 2400

Creditors Velocity Creditors Velocity

Outstanding Creditors ----------------------------- X12 Credit Purchases 100 ------ X12 = 1.25 (All purchases are credit purchases.) 960* Raw material consumption is taken as purchases.