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Thread: Management Accounting

  1. #1
    zahir is offline Respected Members Respected MemberLoyal Member
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    Default Management Accounting

    Hey all Happy Diwali
    a lil help in management accounts.
    Under which heading should General expenses and Other expenses come in vertical balance sheet.
    Would be grateful if you guys can give me full performa Balance sheet with complete heads followed by all items.
    PS: (In books they have not mentioned the full items)
    Thanx
    Last edited by zahir; 24-10-06 at 11:37 PM.

  2. #2
    Join Date
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    Default

    Hi,

    Firs of all, are you sure you are asking for vertical balance sheet? or its about vertical statement?
    because General & Other Expenses comes in vertical statement,

    Now if its about vertical statement here is your answers -

    General Expenses - comes under COST OF GOODS SOLD,
    i.e - Cost Of Goods Sold
    (+) General Expenses

    Other Expenses - if they have mentioned = Other Expenses OR Other Office Expenses thn it comes under OFFICE EXPENSES
    and if they have mentioned = Other Factory Expenses thn it goes under MANUFACTURING EXPENSES

    The formate of vertical statement and vertacal balance sheet is as follows -

    Vertical Statement-

    Sales
    NET SALES
    (-) Cost Of Goods Sold
    GROSS PROFIT
    (+)Operating Income
    (-)Operating Expenses
    OPERATING PROFIT
    (+)Non-Operating Income
    (-)Non-Operating Expenses
    NPBT [Net Profit Before Tax]
    (-) Tax
    NPAT [Net Profit After Tax]
    (-) Appropriating
    RETAINED EARNINGS

    -------------------------------------------------------------------------

    Vertical Balancesheet-

    Sources Of Funds
    (A)Share Holders Funds
    (+)Reserve & Surplus
    (-)Fctitious Assets
    (B)Borrowed Funds
    TOTAL FUNDS EMPLOYED
    Applications Of Funds
    1- Fix Assets
    2- Investments
    3- Working Capital
    C.A [ Current Assets ]
    (-) C.L [Current Liabilities ]
    TOTAL CAPITAL EMPLOYED
    All The Best
    Megha.

  3. #3
    zahir is offline Respected Members Respected MemberLoyal Member
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    Sep 2005
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    Default

    MEGHU THANKS A TON FOR YOUR EFFORTS.
    ONE MORE QUESTION.
    CAN YOU SPREAD THE HEADINGS OF ALL THESE IN FULL DETAILS ?
    SO THAT ITS HELPFUL TO REMEMBER THE ENTIRE SUB HEADS AND SPREADED HEADS.
    MEGHU CAN YOU PLS HELP ME IN SPREADING THE ENTIRE CONTENTS UNDER THESE HEADS ? ONLY USED IN VERTICAL FORM.
    Cost Of Goods Sold
    Operating Income
    Operating Expenses
    a) Admin - ? (FULL LIST OF ADMIN EXPENSE)
    b) Selling & Dis - ? (FULL LIST)
    c) Finance - ? (FULL LIST)
    Non-Operating Income (FULL LIST)
    Non-Operating Expenses (FULL LIST)

    --------------------------------------------------------------------
    Sources Of Funds
    (A)Share Holders Funds
    (+)Reserve & Surplus
    (-)MIS. EXP / Fctitious Assets (FULL LIST OF MIS. EXP)
    (B)Borrowed Funds FULL LIST
    TOTAL FUNDS EMPLOYED
    Applications Of Funds
    1- Fix Assets FULL LIST
    2- Investments FULL LIST
    3- Working Capital FULL LIST
    C.A [ Current Assets ] FULL LIST
    (-) C.L [Current Liabilities ] FULL LIST
    TOTAL CAPITAL EMPLOYED

    IN BOOKS WE DON'T HAVE MUCH TO SURF. BUT IT WILL GIVE MORE INSIGHT TO OTHER USERS TOO WHEN THEY SEE THE DIVISION OF HEADS.
    AND OFCOURSE IT WILL HELP US ALONG.
    THANKS..

  4. #4
    Join Date
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    Vertical Statement-

    cash Sales
    credit sales
    (-) sales tax
    (-) any other adjustment
    (-) returns

    NET SALES

    (-) Cost Of Goods Sold
    a) opening stock of raw material
    (+) purchases
    (+) buying expenses
    (-) closing stock of raw material
    (+) carriage inward
    (-) returns
    (-) sale of scrap

    b) direct wages

    c) manufacturing expenses
    depreciation on machinery
    power
    factory rent

    d) opening stock of W.I.P
    opening stock of F.G

    e) closing stock of W.I.P
    closing stock of F.G

    GROSS PROFIT
    (+)Operating Income
    discount received
    commission received
    royalty received

    GROSS OPERATING INCOME

    (-)Operating Expenses
    a) office & administrator
    ofice rent
    depreciation on furniture
    salary
    audit fees

    b) selling expenses
    travelling expenses of sales man
    advertisement
    depreciation on delivery vans

    c) finance expenses
    bad debts
    interest
    discount

    OPERATING PROFIT

    (+)Non-Operating Income
    profit on sales of fixed assets
    dividend received

    (-)Non-Operating Expenses
    loss by theft
    loss on sale of F.A

    NPBT [Net Profit Before Tax]
    (-) Tax

    NPAT [Net Profit After Tax]

    (-) Appropriating
    dividend paid
    transfer to any reserve

    RETAINED EARNINGS

    -------------------------------------------------------------------------

    Vertical Balancesheet-

    Sources Of Funds
    (A)Share Holders Funds
    share capital
    equity
    preferance

    (+)Reserve & Surplus
    general reserve
    P/L account(cr.Ball)
    security premium

    (-)Fctitious Assets
    P/L account(dr.Ball)
    preliminary exp.

    share holders funds/ net worth/ properitors fund

    (B)Borrowed Funds
    secured loan
    debentures
    unsecured loan

    TOTAL FUNDS EMPLOYED

    Applications Of Funds
    1- Fix Assets
    gross block
    (-)depreciation
    net block
    capital W.I.P

    2- Investments
    (long/Trade)

    3- Working Capital
    C.A [ Current Assets ]
    marketable investment
    cash
    debtors
    stock
    prepaid expenses

    (-) C.L [Current Liabilities ]
    creditors
    bank O/D
    O/S expenses
    provision for tax and proposed dividend

    TOTAL CAPITAL EMPLOYED
    All The Best
    Megha.

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