Financial Statement:

Financial statement are the final product of an accounting system.

A typical set of financial statements include (1) Balance Sheet (2)
Income Statement(3) Statement of changes in Financial Position.
1.Balance Sheet:
Balance Sheet means a sheet containing a list of
account balances of assets, liabilities and owner’s equity as on a
specified date. It shows financial position also. Balance sheet is
also called statement of financial position.
2.Income Statement:
Income statement is the summary of revenues
and expenses for an accounting period. It measures the results of
operations of the accounting entity in terms of profit or loss for the
period covered. It is also called statement of operations.
3.Statement of Changes in Financial Position:
This statement
shows sources and uses of financial resources during the
accounting period. This statement is prepared from the
accounting data originally collected for balance sheet and
income statement.
Performa:

Company Name:…………
Cost of goods Manufactured& Sold Statement.
For the Year Ended:…………

Details Amount Amount

Opening Raw Material
Add-Purchases ----------------
Less-Discount on purchase ---------
Less – Return on purchase ----------
Add- Freight in
Add- Carriage in
=Material available for use
Less-Closing Raw Material
=Material Consumed/Used
Add-FOH(w1)
=Total Manufacturing Cost
Add-Direct Labour
=Prime Cost
Add-Opening W-I-P
=Cost of goods available for
manufacturing
Less-Closing W-I-P
=Cost of goods manufactured
Add-Opening Finished goods
=Cost of goods available for sales
Less-Closing Finished goods
(Add or Less FOH working 2)
=Cost of goods Sold
NOTE:
WORKING 1:
If the FOH(factory overhead) is given applied at the direct labour
or any other thing which is in the CGS statement then in the CGS statement
FOH applied written if not given the applied FOH then written in the CGS
statement Actual FOH.
WORKING 2:
If actual and applied both are given in the CGS statement.
Fist of all Calculation of the Actual FOH
Details Amount
Actual Factory overhead(FOH)
Less-Factory Overhead(FOH)
Applied
=Under / Over Applied
NOTE:
1:(If FOH applied less than Actual
FOH then extra amount add in the
CGS Statement named over applied )
2:(If FOH applied more than Actual
FOH then extra amount less in the
CGS statement named under applied)

Company Name:--------------
 Income Statement:-----------------
As the Year Ended:---------------

Details Amount Amount

Sales
Less – discount on sales
Less – return on sales
=Net sales
Less- CGS
=Gross Profit / Loss
Less Other Expenses:
Marketing Exp.
Selling Exp.
Distribution Exp.
Administrative Exp.
=Net Profit / Loss

Some Important Formulas:

1:Prime Cost=
Material used + Direct Labour
2:Conversion Cost =
Direct Labour + Factory Overhead (applied)
3:Total Manufacturing Cost (T.M.C)=
Material used + Direct Labour + FOH
4:No.of Units Manufactured =
Units sold + Finish Goods Closing – Finish Goods Opening
5: Per Unit Manufactured Cost =
Cost of Goods Manufactured ÷ Units Manufactured
6: Gross Profit Rate on Cost =
Gross Profit ÷ C.G.S × 100
Ans= --------%
7: Gross Profit On Sale =
G.P ÷ Sale × 100
Ans= --------%

8: Net Profit Rate on Cost =

N.P ÷ C.G.S × 100
Ans= --------%
9: Net Profit Rate on Sale =
Net Profit ÷ Sale × 100
Ans= --------%

10:Gross Profit Per Unit Cost =

G.P ÷ Units Sold = Rs. ----------Per Unit Cost.
11:Net Profit Per Unit Cost =
N.P ÷ Units Sold = Rs.------------Per Unit Cost.
Note 1: If find out the per unit cost of Net or Gross Profits(N.P,G.P) then
should be taken the No. of Units is Units Sold always.
Note 2: When obtain the per unit cost of any thing then not multiply the 100
and when we change the anything in percentage then multiply the 100.
Note 3: If FOH applied more than 100% then apply this formula.
Amount × 100 ÷ rate of applied
For Example = 150 % FOH of Direct Labour = 9000
It is solved by this method
9000 × 100 ÷ 150
Calculation of Actual FOH:

Details Amount
Heat and power
Indirect material consumed
Indirect labour
Depreciation of any Asset
Tool expenses
Fire insurance
Misc. FOH
Factory office salaries
Superintendence
Factory taxes
Employer’s contribution provident
fund
(any other expense which is related
to Factory)
Indirect Materials:
Cotton waste
Factory office supplies
Fuel, oil coal etc.
Lubricants
 Perishable tools
Repair and maintenance stores.
Indirect Labour:
Cleaners, janitors, helpers
Factory office staff
Foreman, supervisors etc
Idle time wages
Overtime premiums
Payroll contributions and taxes
Paid leaves
Quality inspectors
Other indirect Expenses:
Depreciations
Electricity and gas bills
Insurance
Normal rework on defective production
Normal spoilage
Property taxes
Rent
Service departments’ expenses