Professional Documents
Culture Documents
The Balance Sheet of a company has to be prepared as per the format given in Part I of Schedule VI to the Companies Act. Schedule VI, Part I prescribes two alternative forms in which balance sheet should be prepared I) Horizontal Form and II) Vertical Form.
5. Cash in Hand and Bank Balance B) Loans and Advances: These include: 1. Advances to subsidiaries 2. Bills of Exchange 3. Prepaid Expenses 4. Advance Tax and TDS
Operating Profit is arrived deducting selling, administrative and general expenses , provision for bad debts, interest and miscellaneous expenses from the gross profit. ie Op Profit = Gr Prof - (Sel & adm exp + Prov bad debt + mis exp ) Profit Before Tax When other income is added and other expenses are deducted from the operating profit we get profit before Tax ie PBT = Op Profit + oth Inc - oth exp Net Profit When provision for taxes is deducted from the Profit Before Tax we get Net profit ie Net Profit = PBT - taxes
Sales Less: Cost of Goods Sold Gross Profit Less: Operating Expenses Operating Profit Less: Non Oprtng Exp Add: Non-Oprtng Incomes
Profit before Interest and Tax 200 Less: Interest 25 Profit before Tax 175 Less: Tax 50 Profit after Tax 125 Less: Preference Dividend 15 Profits Available to Equity Sholders110