From the following statement of Profit & Loss of Rajshree Ltd., you are required to prepare a Value Added Statement for the year ended 31 st March, 2018. Also prepare a reconciliation statement reconciling the gross
CS Executive · Corporate and Management Accounting · PYQS · December 2018
From the following statement of Profit & Loss of Rajshree Ltd., you are required to prepare a Value Added Statement for the year ended 31 st March, 2018. Also prepare a reconciliation statement reconciling the gross value added and profit before tax: Particulars ('000) ('000) Income: Sales 7,000 Other income (dividend) 100 7,100 Expenses: Production and operational charges (Note 1) 4,490 Administrative expenses (Note 2) 210 Finance and other cost (Note 3) 780 Depreciation 20 5,500 Profit before tax 1,600 Provision for tax 100 Profit after tax 1,500 Balance of profit brought forward from last balance sheet 200 1,700 Transferred to general reserve 800 Dividend paid 400 1,200 Surplus carried to balance sheet 500 Notes: 1. Production and operational charges consists of: Raw materials consumed 2,700 Local taxes 190 Salaries and wages 1,200 Other production expenses 400 Total 4,490 2. Administration charges include salaries to directors 10 3. Finance and other cost include: (a) Interest : on bank overdraft (temporary nature) 130 on fixed loan 80 on working capital loan 40 (b) Excise duties amount to 10% of the total value added by manufacturing and trading activities.
Answer & Explanation:
Value Added Statement For the year ended 31 st March 2018 Particulars ('000) ('000) Sales 7,000 Less: Cost of bought in materials and services: 3,100 Production and operational charges (4490-190-1200) 200 Admn. Expenses (210-10) Finance & other Cost: Interest on Bank overdraft 130 Interest on working capital loan 40 Excise duty (10% of 3000) 300 Other Charges (Balancing figures) 230 700 4,000 Value added by manufacturing and trading activities: 3,000 Add: Other incomes (Dividend) 100 Total Gross Value Added 3,100 Application of Value Added Item ('000) % Employees: Salaries to Admin staff 1200 Directors: Salaries & Commission 10 38.71 Government : Local Tax 190 0.32 Income Tax 100 290 Providers of capital: Interest on Fixed Loan 80 9.35 Dividend 400 480 Business: Depreciation 20 15.49 General Reserve 800 Retained Profit (500-200) 300 1120 36.13 3,100 100 Reconciliation Statement Particulars Amount ('000) Profit before tax 1,600 Add back: Depreciation 20 Salaries etc. 1,200 Director's Remuneration 10 Interest on Fixed Loan 80 Local Tax 190 Total 3,100 Note: Total finance and other cost: 780-80 (Interest on fixed loan) = 700
Topics: Management Accounting
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