Question

From the following information, prepare a Comparative Statement of Profit and Loss of Smart Ltd. : 

Hint:

To prepare a Comparative Income Statement: 1. List items vertically (Revenue, Expenses, PBT, Tax, PAT). 2. Show amounts for the Previous Year (Base Year) and Current Year. 3. Calculate Absolute Change (Current Year - Previous Year). 4. Calculate Percentage Change ([Absolute Change / Previous Year Amount] * 100). Ensure calculations are done for each line item, including totals and profits.

Answer 1

Comparative Statement of Profit and Loss

Particulars	Note No.	2023-24 (₹)	2022-23 (₹)	Absolute Change (₹)	Percentage Change (%)
Revenue from Operations		24,00,000	20,00,000	4,00,000	20%
Cost of Materials Consumed		6,00,000	4,00,000	2,00,000	50%
Employee Benefit Expenses		4,00,000	2,00,000	2,00,000	100%
Total Expenses		10,00,000	6,00,000	4,00,000	66.67%
Profit Before Tax (PBT)		14,00,000	14,00,000	0	0%
Tax (50%)		7,00,000	7,00,000	0	0%
Profit After Tax (PAT)		7,00,000	7,00,000	0	0%

Explanation:

1. Revenue from Operations: Increased from ₹20,00,000 to ₹24,00,000, showing an increase of ₹4,00,000 or 20%.

2. Cost of Materials Consumed: Increased from ₹4,00,000 to ₹6,00,000, showing an increase of ₹2,00,000 or 50%.

3. Employee Benefit Expenses: Increased from ₹2,00,000 to ₹4,00,000, showing a significant increase of ₹2,00,000 or 100%.

4. Profit Before Tax (PBT): Revenue-Cost of Materials-Employee Benefit expenses. So, it becomes 2400000-600000-400000=1400000 and 2000000-400000-200000=1400000. Increased from ₹14,00,000 to ₹14,00,000, showing an increase of ₹0 or 0%.

5. Tax: Tax is calculated at 50% on PBT. Increased from ₹7,00,000 to ₹7,00,000, showing an increase of ₹0 or 0%.

6. Profit After Tax (PAT): PBT - Tax. Increased from ₹7,00,000 to ₹7,00,000, showing an increase of ₹0 or 0%.