From the following information of CN Ltd., prepare a common size Statement of Profit and Loss for the years ended 31st March, 2023 and 31st March, 2024 :
Statement of Profit (in ₹)
Particulars 2023–24 (₹) 2022–23 (₹) Revenue from Operations 40,00,000 20,00,000 Less: Purchase of Stock-in-Trade 8,00,000 4,00,000 Less: Other Expenses 4,00,000 2,00,000 Profit Before Tax 28,00,000 14,00,000 Less: Tax @ 50% 14,00,000 7,00,000 Net Profit After Tax 14,00,000 7,00,000
Statement of Profit (in ₹)
| Particulars | 2023–24 (₹) | 2022–23 (₹) |
|---|---|---|
| Revenue from Operations | 40,00,000 | 20,00,000 |
| Less: Purchase of Stock-in-Trade | 8,00,000 | 4,00,000 |
| Less: Other Expenses | 4,00,000 | 2,00,000 |
| Profit Before Tax | 28,00,000 | 14,00,000 |
| Less: Tax @ 50% | 14,00,000 | 7,00,000 |
| Net Profit After Tax | 14,00,000 | 7,00,000 |
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Solution and Explanation
For 2023-24:
Gross Profit = ₹ 40,00,000 – ₹ 8,00,000 – ₹ 4,00,000 = ₹ 28,00,000
Tax = 50% × ₹ 28,00,000 = ₹ 14,00,000
Profit After Tax = ₹ 14,00,000 For 2022-23:
Gross Profit = ₹ 20,00,000 – ₹ 4,00,000 – ₹ 2,00,000 = ₹ 14,00,000
Tax = 50% × ₹ 14,00,000 = ₹ 7,00,000
Profit After Tax = ₹ 7,00,000
Step 2: Common Size Statement
| Particulars | 2023–24 (%) | 2022–23 (%) |
|---|---|---|
| Revenue from Operations | 100.00 | 100.00 |
| Purchase of Stock-in-Trade | 20.00 | 20.00 |
| Other Expenses | 10.00 | 10.00 |
| Profit Before Tax | 70.00 | 70.00 |
| Tax @ 50% | 35.00 | 35.00 |
| Profit After Tax | 35.00 | 35.00 |
Explanation: All items are expressed as a percentage of Revenue from Operations (assumed as base = 100%). The profitability structure remained unchanged across both years.
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