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Why is Income statement prepared?
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Answer / suman
to know the profit or loss for a particular accounting
period
| Is This Answer Correct ? | 38 Yes | 4 No |
Answer / irfan khan
income statement is prepared to know the income of the
business, it is a statement which shows income form
operating and non-operating operations and to know PBIT,PBT
AND PAT
| Is This Answer Correct ? | 23 Yes | 2 No |
Answer / rabindra kumar mallick
It is the statement to know about the financial position of
business, wheather it may profitable or loss.
| Is This Answer Correct ? | 8 Yes | 1 No |
Answer / jitendra
TO KNOW THE PROFIT AND FOR INCOME TAX FILING RETURN
| Is This Answer Correct ? | 7 Yes | 3 No |
Answer / rabindra mallick
It is a very good question for each and every finance
professionals.
The main purpose for preparing Income Statement as described
below...
(01) To know the operating performance for the particular
period.
(02) To analyse the key areas of success and failure for
that particular period accordingly set target.
(03) The income statement also helps as past data for
further Budgeting as well as Budgetary Control.
That End, Thanks
| Is This Answer Correct ? | 4 Yes | 0 No |
Answer / rabindra kumar mallick
The only moto is to find out the net result of business
organisation so that it is the statement to find out that.
| Is This Answer Correct ? | 5 Yes | 2 No |
Answer / kalpana
income statement is prepared to know the excess of income
over expenditure.
| Is This Answer Correct ? | 5 Yes | 3 No |
Answer / jitendra kumar mishra
Actually income statement is prepared for the purpose of to
know real profit or loss during the accounting period. it
also disclose what comes and what goes out during that
period.
| Is This Answer Correct ? | 4 Yes | 5 No |
Answer / megha gera ca
for checking the profit.and making the balance sheet
| Is This Answer Correct ? | 0 Yes | 2 No |
Answer / rekha bai
The income statement, which is sometimes called the statement of earnings or statement of operations, is prepared first. income statement is prepared to know the income of the business,income statement is a statement which is prepared to find out net income. the income is available to the share holders.
| Is This Answer Correct ? | 0 Yes | 3 No |
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DHPL is a small sized firm manufacturing hand tools. It manufacturing plan is situated in haryana. The company's sales in the year ending on 31st march 2007 were Rs.1000 million(Rs.100 crore) on an asset base of Rs.650 million. The net profit of the company was Rs.76 million. The management of the company wants to improve profitability further. The required rate of the company is 14 percent.The company is currently considering an investment proposal. One is to expand its manufacturing capacity. The estimated cost of the new equipment is Rs.250 million. It is expected to have an economic life of 10 years. The accountant forecasts that net cash inflows would be Rs.45 million per annum for the first three years, Rs.68 million per annum from year four to year eight and for the remaining two years Rs.30 million per annum. The plant can be sold for Rs.200 million: (a) The company can borrow funds from a nationalized bank at the interest rate of 14 percent for 10 years. It will be required to pay equal annum installment of interest and repayment of principal. (b) A financial institution has offered to lend money to DHPL at 13.5 per annum but it needs to pay equated quarterly installment of interest and repayment of principal. Questions: (1) Should the company expand its capacity? show the computation of NPV. (2) What is the annual installment of bank loan? (3) calculate the quarterly installment of the financial institution loan. (4) should the company borrow from the bank of from the financial institution?
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