NCERT Solutions for Commerce Accountancy Class 12 Analysis of Financial

Numerical Questions

Q1: Following are the balance sheets of Alpha Ltd., as at March 31, 2016 and 2017.
You are required to prepare Comparative Balance Sheet.

Sol:
Follow these clear steps to prepare a Comparative Balance Sheet:
- List all items of Equity and Liabilities and Assets side by side for both years (2016 and 2017).
- For each item compute the Absolute Change = (2017 amount - 2016 amount). Use a plus sign for increase and minus sign for decrease.
- Compute the Percentage Change = (Absolute Change ÷ 2016 amount) × 100%. For any item where the 2016 amount is zero, show percentage change as not applicable or indicate that a percentage cannot be computed.
- Ensure that totals on the Liabilities side and Assets side are equal for each year; the Comparative Balance Sheet presents these totals and their changes.
- Pay attention to items such as fresh capital introduced, dividend payments, profit or loss for the year and revaluation reserves - treat them according to the information given in the original balance sheets.
- The prepared comparative schedule in the provided images shows the item-wise figures, absolute change and percentage change. Use that table to verify calculations and totals.

Q2: Following are the balance sheets of Beta Ltd. at March 31st, 2016 and 2017:

Sol:
- Prepare the comparative columnar format with columns for 2016, 2017, Absolute Change and % Change.
- For each liability and asset, compute change as (2017 - 2016).
- Show increases as positive and decreases as negative. For example, changes in long-term borrowings, trade payables, fixed assets and current assets should be computed consistently.
- Reconcile the totals to ensure that the total liabilities equal total assets for each year. The images supplied contain the detailed numeric comparative schedule for Beta Ltd.; follow the same method to verify individual line items and totals.

Q3: Prepare Comparative Statement of profit and loss from the following information.

Working Notes:
1. Calculation of Net Sales
Net Sales = Cost of Goods Sold + Gross Profit - Sales Return
or, Net Sales = Purchases + Manufacturing Expenses + Change in Inventory + Gross Profit - Sales Return
Net Sales (2016) = 80,000 + 20,000 + 30,000 + 90,000 - 4,000 = Rs 2,16,000
Net Sales (2017) = 1,40,000 + 50,000 - 60,000 - 30,000 - 80,000 = Rs 92,000
2. Calculation of Finance Cost
Finance Cost = Interest on short-term loans + Interest on 10% Debentures
Finance Cost (2016) = 20,000 + 1,000 = Rs 21,000
Finance Cost (2017) = 20,000 + 2,000 = Rs 22,000
3. Calculation of Other Expenses
Other Expenses = Freight Outward + Carriage Outward + Loss on sale of office car
Other Expenses (2016) = 10,000 + 10,000 + 60,000 = Rs. 80,000
Other Expenses (2017) = 20,000 + 20,000 + 90,000 = Rs. 1,30,000

Sol:
- A Comparative Statement of Profit and Loss shows each item of income and expense for both years together with the absolute and percentage change.
- Begin with Net Sales (use the Working Note 1 formula).
- Deduct Cost of Goods Sold to arrive at Gross Profit for each year.
- Show operating expenses (selling, administrative) and then compute Operating Profit.
- Add other incomes (if any) and subtract Finance Cost (see Working Note 2) and Other Expenses (see Working Note 3) to arrive at Profit Before Tax.
- Deduct tax to get Profit After Tax.
- For each item calculate Absolute Change = (2017 - 2016) and Percentage Change = (Absolute Change ÷ 2016) × 100%.
- The numeric computations are presented in the provided comparative statement images; use those to cross-check each line and the working notes.

Q4: Prepare Comparative Statement of Profit and Loss from the following information:

Working Notes:
1. Calculation of Net Purchases and Change in Inventory
2. Calculation of Finance Cost
Finance Cost = Interest on Bank Overdraft + Interest on Debentures
Finance Cost (2016) = 5,000 + 20,000 = Rs 25,000
Finance Cost (2017) = 0 + 20,000 = Rs 20,000
3. Calculation of Other Expenses
Other Expenses = Carriage outward + Other operating expenses
Other Expenses (2016) = 10,000 + 20,000 = Rs 30,000
Other Expenses (2017) = 30,000 + 10,000 = Rs 40,000

Sol:
- Use the comparative format: list each income and expense head for 2016 and 2017, compute Absolute and Percentage Change.
- Determine Net Purchases after adjusting purchase returns and discounts; compute Change in Inventory by subtracting opening inventory from closing inventory.
- Compute Finance Cost using the formula given in Working Note 2; include interest on bank overdraft and interest on debentures.
- Aggregate operating expenses including carriage outward as in Working Note 3.
- Finally compute Profit Before Tax and Profit After Tax. The images supplied contain the detailed numerical comparative statement and the working figures; consult them to verify item-wise calculations and totals.

Q5: Prepare a Common size statement of  profit and loss of Shefali Ltd. with the help of following information:

Sol:
- A Common Size Profit and Loss Statement expresses each item as a percentage of a base figure. For profit and loss accounts the usual base is Net Sales, which is taken as 100%.
- Compute all items (cost of goods sold, gross profit, operating expenses, finance costs, taxes and net profit) as a percentage of Net Sales for each year.
- Where indirect expenses are given as a percentage of gross profit (as in the Working Note), calculate the rupee amount first and then express it as a percentage of Net Sales.
- The prepared common size statements provided in the images show the percentage relationships for 2016 and 2017; use those tables to check how each expense and profit item relates to Net Sales.

Q6: Prepare a Common Size balance sheet from the following balance sheet of Aditya Ltd., and Anjali Ltd.:

Sol:
- A Common Size Balance Sheet shows each item as a percentage of the total assets (or total liabilities) - the total is taken as 100% (here Rs 10,00,000).
- For each balance sheet item compute: Percentage = (Item Amount ÷ Total Assets) × 100%.
- Present the common size percentages for both companies side by side to compare their financial structure (for example, composition of fixed assets, investments, current assets, long-term borrowings, current liabilities and equity).
- Ensure that the sum of percentage figures on either side equals 100%. The image provided contains the completed common size balance sheets for Aditya Ltd. and Anjali Ltd.; use it to verify individual line calculations and the final totals.