Management Accounting

[zahir]

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

[Megha]

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

[zahir]

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..

[Megha]

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