YASH CLASSES

ACCOUNTING FOR MANAGERS

VALUE ADDED ACCOUNTING

Value Added Statement Particulars Net sales (Sales Sales Return) Less : Cost of materials and Cost of services Cost of raw material purchased Purchase Expenses Sundry materials (other) Power & Electricity ------------------------------------Value Added Distribution Employees (Salary Bonus & Wages) Investors (Interest & dividend) Government (tax) Depreciation -------------------------------------______ -------------------______ Amount -----------

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YASH CLASSES Example 1

ACCOUNTING FOR MANAGERS

Following is the Profit / Loss account of X Ltd. for the year 1999.

Particulars Cost of R.M. Packing Materials Other Materials Depreciation Salary & Bonus Contribution to P.F. Stationery & postage Interest on Loan Employees welfare Exps. Directors Fees Power Maintenance of Machines Tax Provision Profit

Amount Particulars 4,80,000 Sales 8,000 10,000 15,000 60,000 12,000 12,000 14,000 4,000 5,000 10,000 10,000 80,000 80,000

Amount 8,00,000

8,00,000 Prepare Value Added Statement.

8,00,000

Answer Value Added Statement Particulars Net Sales Less : Cost of materials and Cost of services Cost of Raw Materials Packing Materials Other Materials Stationery & Postage Power Maintenance of Machine Value Added Amount Amount 8,00,000

4,80,000 8,000 10,000 12,000 10,000 10,000

5,30,000 2,70,000

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YASH CLASSES Distribution of Value Added Employees : Salary & Bonus Contribution to P.F. Employees Welfare Exps. Directors Fees Interest : Interest on Loan Government :Tax Provision Depreciation : Depreciation Return Earning : Return earning Working :

ACCOUNTING FOR MANAGERS

60,000 12,000 4,000 5,000

81,000 14,000 80,000 15,000 80,000 2,70,000

Amount spent on Employees (%) (When Asked) Rs. 2,70,000 : Rs. 81,000 100 : (?) = 30%

Example 2 X Ltd. provides you following information. Particulars Amount Plant & Machinery 5,40,000 Loss on sale of Machinery 30,000 Sales 12,00,000 Depreciation on plant & machinery 1,00,000 Bank balance 50,000 Stationery & printing 11,000 Audit fee 14,000 Purchase of raw materials 3,12,000 Sales return 70,000 Rent & taxes 80,000 Interest on loan 20,000 Tax paid 1,25,000 Salary & wages 1,60,000 Employees state insurance premium(ESI) 18,000 P.F. Contribution 14,000 Dividend on share capital 72,000 Prepare vertical P/L a/c and Value Added Statement. [self practice]

Example 3 X Ltd. provides you following information. Particulars Raw materials Raw material returned to suppliers Amount 2,50,000 10,000 Page 3

YASH CLASSES Other materials Sales Depreciation Stationery & printing Sales return Interest on loan Tax provision Power Employees welfare exps. P.F. Contribution Directors fees Bonus Factory repairs Salary

ACCOUNTING FOR MANAGERS 9,000 4,25,000 7,500 6,000 25,000 7,000 40,000 5,000 2,000 6,000 2,500 5,000 5,000 25,000

Prepare vertical P/L a/c and Value Added Statement. Answer Profit / Loss Account (vertical) Particulars Amount Net Sales 4,25,000 Less : Sales Return 25,000 Less : Purchase Add.: Returned to suppliers Gross Profit Less : Operating Expenses Depreciation Stationery & postage Bonus P.F. Contribution Interest on Loan Employees welfare expenses Salary Power Factory Repairs Directors fees Other materials PROFIT BEFORE TAXES Less : Tax Provision PROFIT AFTER TAXES 2,50,000 10,000 7,500 6,000 5,000 6,000 7,000 2,000 25,000 5,000 5,000 2,500 9,000 80,000 80,000 40,000 40,000 Amount 4,00,000

2,40,000 1,60,000

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YASH CLASSES Value Added Statement Particulars Net Sales Less : Cost of materials and Cost of services Cost of Raw Materials - Raw material returned Other Materials Stationery & Postage Power Factory repairs Value Added Distribution of Value Added Employees : Salary & Bonus Contribution to P.F. Employees Welfare Exps. Directors Fees Interest : Interest on Loan Government :Tax Provision Depreciation : Depreciation Return Earning : Return earning

ACCOUNTING FOR MANAGERS

Amount

Amount 4,00,000

2,50,000 10,000 2,40,000 9,000 6,000 5,000 5,000

2,65,000 1,35,000

30,000 6,000 2,000 2,500

40,500 7,000 40,000 7,500 40,000 1,35,000

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