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Trading and Profit and

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2/11/13 Trading and Profit and Loss Account and Balance Sheet - Examples

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Home » Final Accounts » Examples of Trading and Profit and Loss Account and Balance Sheet
Managerial Accounting

■ Introduction to Managerial Accounting

■ Business and Quality Improvement Programs
■ Cost Terms, Concepts and Classification
Get New Customers Online ■ Job Order Costing system
www.Google.com/AdWords ■ Process Costing System
Advertise On Google. Get 2000 INR ■ Process Costing System -
Beginning Inventory
Addition of Materials &

Advertising Credit When You Sign-Up ■ Controlling and Cos ting Mat erials
■ Materials and Inventory Cost Control
■ By Products and Joint Products Costing
■ Cost-Volume-Profit-Relationship
■ Variable Costing System
■ Act ivity Based Costing System
Dear visitor! Accounting4management.com requests you to share this site with your friends. ■ Budgeting and Planning
Thanks. ■ Standard Costing and Variance Analysis
■ Gross Profit Analysis
Examples of Trading and Profit and Loss ■ Linear Programming Technique
Account and Balance Sheet: ■ Segment Reporting and Transfer Pricing
■ Capital Budgeting Dec isions
Learning Objective s: ■ Service Department Costing
■ Cash Flow statement
1. Prepare trading and profit and loss account and balance sheet.
■ Financial statement Analysis
Example 1: ■ Pricing Products and Services
■ Managerial Accounting Terms and Definitions
From the following balances extracted from the books of X & Co., prepare a trading and ■ Managerial / Cost Accounting Formulas
profit and loss account and balance sheet on 31st December, 1991.

$ $
Stoc k on 1st January 11,000 Returns outwards 500
Bills receivables 4,500 Trade expenses 200
Purchases 39,000 Offic e 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
Product Suppliers
The stock on 21st December, 1991 was valued at $25,000.
www.hktdc.com

Solution: Source quality products at Best SMB Site

- hktdc.com
X & Co.
Trading and Profit and Loss Account
For the yea r ended 31st December, 1991

To Opening stoc k 11,000 | By Sales 60,000

To Purchases 39,000 | Less returns i/w 1,300
Less returns o/w 500 | 58,700
38,500 | By Closing stock 25,000
To Carriage inwards 800 |

To Wages 2,800 |

To Gross profit c /d 30,600 |

83,700 | 83,700
|

To St ationary 450 | By Gross profit b/d 30,600

To Rent and rates 1,100 |

To Carriage outwards 1,450 |

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2/11/13 Trading and Profit and Loss Account and Balance Sheet - Examples
To Insurance 700 |

To T rade expenses 200 |

To Commission 800 |

To Interest on capital 700 |

To Net profit transferred |

25,200
to c apital a/c
|

30,600 | 30,600
| Financial Accounting
X & Co.
Balance Sheet ■ Bookkeeping and Bookkeeping Terms
As at 31st December, 1991
■ Acc ounting Principles and Ac counting
Liabilities $ | Assets $ Equation
Creditors 19,650 |
Cash in hand 500 ■ Journal
|
Bills payable 3,000 Cash at bank 4,750 ■ Ledger
|
Capital 17,900 Sundry debtors 30,000 ■ Accounting For Bills of Exchange
|
Add Net profit 25,200 Bill rec eivable 4,500
|
■ Subdivision of Journal
43,100 Stoc k 25,000
|
Offic e equipment 1,000 ■ Final Accounts
| ■ Capital and Revenue It ems
|
65,750 65,750 ■ Single Entry System/Accounting From
| Incomplete Records
■ Accounting For Non-Trading Concerns
Example 2: ■ Accounting for Consignment / Consignment
Accounts

The following trial balance was taken from the books of Habib-ur-Rehman on December 31, ■ Acc ounting for Joint Ventures
19 ....
■ Accounting for Depreciation
Cash 13,000
Sundry debtors 10,000
Bill rec eivable 8,500
Opening stock 45,000
About us !
Building 50,000
Furniture and fittings 10,000
Investment (Temporary) 5,000 Also see formula of gross margin ratio method
Plant and Machinery 15,500 with financial analysis, balance sheet and
income statement analysis tutorials for free
Bills payable 9,000
download on
Sundry creditors 20,000 Acc ounting4Management.com.Accounting
Habib's capital 78,200 students can take help from Video lectures,
Habib's drawings 1,000 handouts, helping materials, assignments
solution, Online Quizzes, GDB, Past Papers,
Sales 100,000
books and Solved problems. Also learn latest
Sales discount 400 Accounting & management software
Purchases 30,000 tec hnology with t ips and tricks.
Freight in 1,000
Purchase discount 500
Sales salary expenses 5,000
Advertising e xpenses 4,000
Miscellaneous sales expenses 500
Offic e 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 yea r ended Decembe r 31, 19.....

Gross sales 100,000

Less: Sales discount 400

Net Sales 99,600

Cost of Goods Sold:

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2/11/13 Trading and Profit and Loss Account and Balance Sheet - Examples

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 1,000
Interest expenses 800

Net increase 200

Net inc ome 15,800

Habib-ur-Rehman
Balance Sheet
As at December 31, 19.....

ASSETS
Current Assets:
Cash 13,000
Sundry debtors 10,000
Bills rec eivable 8,500
Stoc k on Dec. 31, 19 .. 10,000
Investment 5,000

Tot al Current Asset s 46,500

Fixed Assets:

Buildings 50,000
Plant and Machinery 15,500
Furniture and fittings 10,000

Tot al Fixed Assets 75,500

Total Assets 122,000

LIABILITIES:
Current Liabilities:
Sundry creditors 20,000
Bills payable 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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2/11/13 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. Trading Ac count
2. Profit and Loss Acc ount
3. Difference Between Trading Acc ount and Profit and Loss Acc ount
4. Balance Sheet
5. Difference Between Trial Balance and Balance Sheet
6. Examples of Trading and Profit and Loss Account and Balance Sheet

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