Examples of Trading and Profit and Loss Account and Balance Sheet
Trading account format and accounting trading and profit and loss account examples in balance sheet. Different solved problems in trading profit and loss a/c in final accounts format for carriage outwards.
Learning Objectives:
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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.
| $ | $ | ||
| Stock on 1st January | 11,000 | Returns outwards | 500 |
| Bills receivables | 4,500 | Trade expenses | 200 |
| Purchases | 39,000 | Office fixtures | 1,000 |
| Wages | 2,800 | Cash in hand | 500 |
| Insurance | 700 | Cash at bank | 4,750 |
| Sundry debtors | 30,000 | Tent and taxes | 1,100 |
| Carriage inwards | 800 | Carriage outwards | 1,450 |
| Commission (Dr.) | 800 | Sales | 60,000 |
| Interest on capital | 700 | Bills payable | 3,000 |
| Stationary | 450 | Creditors | 19,650 |
| Returns inwards | 1,300 | Capital | 17,900 |
The stock on 21st December, 1991 was valued at $25,000.
Solution:
X & Co.
Trading and Profit and Loss Account
For the year ended 31st December, 1991
| To Opening stock | 11,000 | | | By Sales | 60,000 | ||
| To Purchases | 39,000 | | | Less returns i/w | 1,300 | ||
| Less returns o/w | 500 | | |
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58,700 | ||
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38,500 | | | By Closing stock | 25,000 | ||
| To Carriage inwards | 800 | | | ||||
| To Wages | 2,800 | | | ||||
| To Gross profit c/d | 30,600 | | | ||||
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| 83,700 | | | 83,700 | ||||
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| To Stationary | 450 | | | By Gross profit b/d | 30,600 | ||
| To Rent and rates | 1,100 | | | ||||
| To Carriage outwards | 1,450 | | | ||||
| 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 | | | ||||
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| 30,600 | | | 30,600 | ||||
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X & Co.
Balance Sheet
As at 31st December, 1991
| Liabilities | $ | | | Assets | $ | |
| Creditors | 19,650 | | | Cash in hand | 500 | |
| Bills payable | 3,000 | | | Cash at bank | 4,750 | |
| Capital | 17,900 | | | Sundry debtors | 30,000 | |
| Add Net profit | 25,200 | | | Bill receivable | 4,500 | |
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43,100 | | | Stock | 25,000 | |
| | | Office equipment | 1,000 | |||
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| 65,750 | | | 65,750 | |||
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Example 2:
The following trial balance was taken from the books of Habib-ur-Rehman on December 31, 19 ….
| Cash | 13,000 | |
| Sundry debtors | 10,000 | |
| Bill receivable | 8,500 | |
| Opening stock | 45,000 | |
| Building | 50,000 | |
| Furniture and fittings | 10,000 | |
| Investment (Temporary) | 5,000 | |
| Plant and Machinery | 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 | 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 | |
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| 2,08,700 | 2,08,700 | |
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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 | 100,000 | ||
| Less: Sales discount | 400 | ||
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| Net Sales | 99,600 | ||
Cost of Goods Sold: |
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| Opening stock | 45,000 | ||
| Purchases | 30,000 | ||
| Add: Freight in | 1,000 | ||
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| 31,000 | |||
| Less purchase discount | 500 | ||
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| Net purchases | 30,500 | ||
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| Cost of goods available fort sale | 75,500 | ||
| Less closing stock | 10,000 | ||
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| Cost of goods sold | 65,500 | ||
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| Gross profit | 34,100 | ||
Operating Expenses: |
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| Selling Expenses: | |||
| Sales salary expenses | 5,000 | ||
| Advertising expenses | 4,000 | ||
| Misc. selling expenses | 500 | ||
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9,500 | ||
| General Expense: | |||
| Office salaries expenses | 8,000 | ||
| Misc. general expenses | 1,000 | ||
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9,000 | ||
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| Total operating expenses | 18,500 | ||
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| Net profit from operations | 15,600 | ||
Other Expenses and Incomes: |
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| Interest income | 1,000 | ||
| Interest expenses | 800 | ||
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| Net increase | 200 | ||
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| Net income | 15,800 | ||
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Habib-ur-Rehman
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mohan
exlent information in the web site
why are the accounts on on on side such that there is no debit and credit side
i sarcascally need help on this accounting process this is my courses of studies?