2/11/13
Trading and Profit and Loss Account and Balance Sheet - Examples
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Examples of Trading and Profit and Loss Account and Balance Sheet: Learning Objectives:
1. Prepare trading and profit and loss account and balance sheet.
Example 1: From the following balances extracted from the books of X & Co., prepare a trading and profit and loss account and balance sheet on 31st December, 1991.
Stationary Returns inwards
450 1,300
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$ 11,000 4,500 39,000 2,800 700 30,000 800 800 700
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Managerial Accounting
Hom e » Final Accounts » Ex am ple s of Trading and Profit and Loss Account and Balance She e t
Stock on 1st January Bills receivables Purchases Wages Insurance Sundry debtors Carriage inwards Commission (Dr.) Interest on capital
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Returns outwards Trade expenses Office fixtures Cash in hand Cash at bank Tent and taxes Carriage outwards Sales Bills payable
$ 500 200 1,000 500 4,750 1,100 1,450 60,000 3,000
Creditors Capital
19,650 17,900
The stock on 21st December, 1991 was valued at $25,000.
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Solution: X & Co. Trading and Profit and Loss Account For the year ended 31st December, 1991 To Opening stock To Purchases Less returns o/w To Carriage inwards To Wages To Gross profit c/d
11,000
|
39,000
|
500
|
38,500
|
800
|
2,800
|
30,600
|
By Sales Less returns i/w
60,000 1,300 58,700
By Closing stock
25,000
|
83,700
83,700
| |
To Stationary
450
|
To Rent and rates
1,100
|
To Carriage outwards
1,450
|
By Gross profit b/d
30,600
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2/11/13
Trading and Profit and Loss Account and Balance Sheet - Examples
To Insurance
700
|
To Trade expenses
200
|
To Commission
800
|
To Interest on capital
700
|
To Net profit transferred to capital a/c
25,200
| | |
30,600
30,600
| |
X & Co. Balance Sheet As at 31st December, 1991 Liabilities Creditors
$ 19,650
|
3,000
| |
Cash at bank
17,900
|
Sundry debtors
Add Net profit
25,200
|
Bill receivable
|
Stock
|
Office equipment
43,100
■ Bookkeeping and Bookkeeping Terms ■ Accounting Principles and Accounting
Assets Cash in hand
Capital
Bills payable
$ 500 4,750 30,000 4,500 25,000 1,000
|
65,750
Financial Accounting
|
65,750
|
Equation
■ Journal ■ Ledger ■ Accounting For Bills of Exchange ■ Subdivision of Journal ■ Final Accounts ■ Capital and Revenue Items ■ Single Entry System/Accounting From Incomplete Records
■ Accounting For Non-Trading Concerns ■ Accounting for Consignment / Consignment
Example 2:
Accounts
The following trial balance was taken from the books of Habib-ur-Rehman on December 31, 19 .... Cash Sundry debtors
■ Accounting for Joint Ventures ■ Accounting for Depreciation
13,000 10,000
Bill receivable
8,500
Opening stock
45,000
Building
50,000
Furniture and fittings
10,000
Investment (Temporary) Plant and Machinery
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5,000 15,500
Bills payable
9,000
Sundry creditors
20,000
Habib's capital
78,200
Habib's drawings
1,000
Sales
100,000
Sales discount
400
Purchases
30,000
Freight in
1,000
Purchase discount
Also see formula of gross margin ratio method with financial analysis, balance sheet and income statement analysis tutorials for free download on Accounting4Management.com.Accounting students can take help from Video lectures, handouts, helping materials, assignments solution, Online Quizzes, GDB, Past Papers, books and Solved problems. Also learn latest Accounting & management software technology with tips and tricks.
500
Sales salary expenses
5,000
Advertising expenses
4,000
Miscellaneous sales expenses
500
Office salary expenses
8,000
Misc. general expenses
1,000
Interest income
1,000
Interest expenses
800 2,08,700
2,08,700
Closing stock on December 31, 19 ... was $10,000 Required: Prepare income statement/trading and profit and loss account and balance sheet from the above trial balance in report form.
Solution: Habib-ur-Rehman Income Statement/Profit and Loss Account For the year ended December 31, 19..... Gross sales Less: Sales discount Net Sales
100,000 400 99,600
Cost of Goods Sold:
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Trading and Profit and Loss Account and Balance Sheet - Examples
Cost of Goods Sold: Opening stock
45,000
Purchases
30,000
Add: Freight in
1,000 31,000
Less purchase discount
500
Net purchases
30,500
Cost of goods available fort sale
75,500
Less closing stock
10,000
Cost of goods sold
65,500
Gross profit
34,100
Operating Expenses: Selling Expenses: Sales salary expenses
5,000
Advertising expenses
4,000
Misc. selling expenses
500 9,500
General Expense: Office salaries expenses
8,000
Misc. general expenses
1,000 9,000
Total operating expenses
18,500
Net profit from operations
15,600
Other Expenses and Incomes: Interest income Interest expenses
1,000 800
Net increase
200
Net income
15,800
Habib-ur-Rehman Balance Sheet As at December 31, 19..... ASSETS Current Assets: Cash
13,000
Sundry debtors
10,000
Bills receivable Stock on Dec. 31, 19 .. Investment
8,500 10,000 5,000
Total Current Assets
46,500
Fixed Assets: Buildings
50,000
Plant and Machinery
15,500
Furniture and fittings
10,000
Total Fixed Assets
75,500
Total Assets
122,000
LIABILITIES: Current Liabilities: Sundry creditors Bills payable
20,000 9,000
Total Current Liabilities
29,000
Fixed Liabilities: Habib's capital
78,200
Net income for the year
15,800
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Trading and Profit and Loss Account and Balance Sheet - Examples 94,000
Less: Drawings
1,000 93,000
Total Liabilities and Capital
122,000
You may also be interested in other articles from "final accounts" chapter: 1. 2. 3. 4. 5. 6.
Trading Account Profit and Loss Account Difference Between Trading Account and Profit and Loss Account Balance Sheet Difference Between Trial Balance and Balance Sheet Examples of Trading and Profit and Loss Account and Balance Sheet
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