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Question
What is meant by a ‘Common Size Statement’?
Solution
Common Size Statements are the statements that depict the relationship between various items of financial statements with some common base (net sales or total of assets) in percentage terms. The Common Size Statements consist of two types of statements namely, Common Size Income Statements and Common Size Balance Sheet.
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RELATED QUESTIONS
Pranav, Karan and Rahim were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. On 31st March 2017 their Balance Sheet was as follows:
| Balance Sheet of Pranav, Karan and Rahim as on 31.3.2017 |
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| Liabilities |
Amount Rs |
Assets |
Amount Rs |
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Creditors General Reserve Capitals Pranav 2,00,000 Karan 2,00,000 Rahim 1,00,000
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3,00,000 1,50,000
5,00,000 |
Fixed Assets Stock Debtors Bank
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4,50,000 1,50,000 2,00,000 1,50,000
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| 9,50,000 | 9,50,000 | ||
Karan died on 12.6.2017. According to the partnership deed, the legal representatives of the deceased partner were entitled to the following:
1) Balance in his Capital Account
2) Interest on Capital @12% p.a.
3) The share of goodwill. Goodwill of the firm on Karan's death was valued at Rs 60,000.
4) Share in the profits of the firm till the date of his death, calculated on the basis of last year’s profit. The profit of the firm for the year ended 31.3.2017 was Rs 5,00,000.
Prepare Karan's Capital Account to be presented to his representatives.
A, B, C and D were partners in a firm sharing profits in 3 : 3 : 3: 1 ratio. On 31st January, 2017 D retired. A, B and C decided to share future profits in the ratio of 5 : 1 : 1. On D's retirement the goodwill of the firm was valued at Rs 4,90,000.
Showing your working notes clearly pass necessary Journal Entry for the treatment of goodwill in the books of the firm on D's retirement.
Ram, Mohan, Sohan and Hari were partners in a firm sharing profits in the ratio of 4 : 3: 2 :1. On 1-4-2016 their Balance Sheet was as follows:
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Balance Sheet of Ram, Mohan, Sohan and Hari as on 1.4.2016 |
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Liabilities |
Amount (Rs) |
Assets |
Amount (Rs) |
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Capitals: |
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Fixed Assets |
9,00,000 |
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Ram |
4,00,000 |
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Current Assets |
5,20,000 |
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Mohan |
4,50,000 |
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Sohan |
2,50,000 |
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Hari |
2,00,000 |
13,00,000 |
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Workmen |
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Compensation Reserve |
1,20,000 |
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14,20,000 |
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14,20,000 |
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From the above data the partners decided to share the future profits in the ratio of 1 : 2 : 3 : 4. For this purpose the goodwill of the firm was valued at Rs 1,80,000. The partners also agreed for the following:
(i) The claim for workmen compensation has been estimated at Rs 1,50,000.
(ii) Adjust the capitals of the partners according to new profit sharing ratio by opening partner’s current accounts.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.
From the following information of a club, show the amounts of Prize awarded and Price Fund in the Financial Statements of the club for the year ended on 31st March 2009 and 31st March 2010:
| Details | Rs |
| Prize Fund as on 1.4.2009 | 20,000 |
| Prize Fund donations received during the year 2009-2010 | 40,000 |
| Prizes awarded during the year 2009-2010 |
69,000 |
