Convert following Trading Account and Profit and Loss Account into Vertical Income Statement:
| Dr. | Trading, Profit and Loss Account for the year ended as on 31st March,2020 | Cr. | |
|---|---|---|---|
| Particulars | Amount ₹ | Particulars | Amount ₹ |
| To Opening stock | 20,000 | By Sales | 1,20,000 |
| To Purchases | 90,000 | By Closing Stock | 30,000 |
| To Carriage inward | 500 | ||
| To Wages | 10,000 | ||
| To Gross Profit c/d | 29,500 | ||
| Total | 1,50,000 | Total | 1,50,000 |
| To Office expenses | 12,500 | By Gross Profit b/d | 29,500 |
| To Selling expenses | 10,000 | ||
| To Finance expenses | 3,000 | ||
| To Net Profit c/d | 4,000 | ||
| 29,500 | 29,500 |
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →A vertical income statement re-arranges the same figures of the Trading and P&L Account in a single-column, step-by-step form: Sales less Cost of Goods Sold gives Gross Profit; less operating expenses gives Operating Profit; less non-operating (finance) expenses gives Net Profit. No figures change - only the presentation.
Working Note - Cost of Goods Sold (COGS)
COGS = Opening Stock + Purchases + Carriage Inward + Wages - Closing Stock
COGS = 20,000 + 90,000 + 500 + 10,000 - 30,000 = Rs. 90,500
Vertical Income Statement for the year ended 31st March 2020
| Particulars | Details Rs. | Amount Rs. |
|---|---|---|
| Net Sales | 1,20,000 | |
| Less: Cost of Goods Sold | ||
| Opening Stock | 20,000 | |
| Add: Purchases | 90,000 | |
| Add: Carriage Inward | 500 | |
| Add: Wages | 10,000 | |
| Less: Closing Stock | (30,000) | (90,500) |
| Gross Profit | 29,500 | |
| Less: Operating Expenses | ||
| Office Expenses | 12,500 |
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.