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Format of Income Statement

This vertical income statement shows the company's revenues and expenses over the year. It begins with gross sales and deducts sales returns to get to net sales. It then subtracts the costs of goods sold, operating expenses, interest paid, and non-operating expenses to arrive at net profit before tax. After subtracting income tax, it shows the net profit after tax and appropriations like dividends to calculate the retained earnings.

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Foram Vasani
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237 views

Format of Income Statement

This vertical income statement shows the company's revenues and expenses over the year. It begins with gross sales and deducts sales returns to get to net sales. It then subtracts the costs of goods sold, operating expenses, interest paid, and non-operating expenses to arrive at net profit before tax. After subtracting income tax, it shows the net profit after tax and appropriations like dividends to calculate the retained earnings.

Uploaded by

Foram Vasani
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Name of the Company

Vertical Income Statement


For the year ending ______________
Particulars Amount (₹) Amount (₹) Amount (₹)
1 Gross SALES
Cash Sales xxx
Credit Sales xxx xxx
(-) Sales Returns (xxx)
NET SALES xxx
2 Less: Cost of Goods Sold
Opening stock xx
(+) Purchases xx
(-) Purchase returns (xx) xx
Wages xx
Carriage Inward xx
Power and fuel xx
Factory Expenses xx xxx
(-) Closing Stock (xx) (xxx)
3 GROSS MARGIN/ GROSS PROFIT xxx
4 Less: Operating Expenses
(a) Office & Administration expenses
Salaries xx
Office rent xx
Depreciation on office assets xx
Other office expenses xx xxx
(b) Selling & Distribution Expenses
Salaries to salesman xx
Deprecation on delivery van xx
Bad debts xx
Distribution expenses xx xxx
(c ) Finance Expenses
Cash discount xx
Bank charges/Commission xx xxx (xxx)
5 OPERATING PROFIT BEFORE INTEREST xxx
6 Less: Interest Paid (xx)
7 OPERATING PROFIT xxx
8 Add: Net Non-Operating Income
(a) Non Operating Income
Profit on sale of fixed assets/Investments xx
Dividend/Interest received xx
Royalty received xx
Share Transfer Fees xx xx
(b) (-) Non Operating Expenses
Loss on sale of fixed assets/Investments xx
Theft of cash/Embezzlement of Cash xx
Damages/Fines/Penalties Paid xx
Fictitious Assets w/o xx (xx) (xxx)
9 NET PROFIT BEFORE TAX (NPBT) xxx
Less: Income Tax (xx)
10 NET PROFIT AFTER TAX (NPAT) xxx
Add: Opening balance of P/L xxx
PROFITS AVAILABLE FOR APPROPRIATION xxx
11 Less: Appropriations
Transfer to General Reserve xx
Proposed Dividend xx
Interim Dividend xx (xxx)
12 RETAINED EARNINGS/ Balance transferred to Balance Sheet xxxx

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