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Trading Account of Arjun Opening Stock Add: Purchases Less: Purchases Return Drawings NET PURCHASES Add: Other Expenses Duty Cartage Inwards Buying Expenses COST OF GOODS AVAILABLE FOR SALE Less: Closing Stock COST OF GOODS SOLD GROSS PROFIT for the year ended 31 December 2011 5,000 Sales 980,000 500,000 Less: Sales Returns 15,000 10,000 Refunds 5,000 20,000 20,000 470,000 NET SALES 960,000 475,000 2,000 900 500 3,400 478,400 50,000 428,400 531,600 960,000
960,000
Profit and Loss Account of Arjun OPERATING EXPENSES SELLING & DISTRIBUTION Advertising Salesmens Salaries Salesmens commission Motor vehicle expenses Cartage outwards Depreciation - Motor vehicles - Shop Fittings OFFICE & ADMINISTRATIVE Salaries Printing & stationery Electricity Telephone Travelling Entertainment Rent paid Depreciation - Office equipment for the year ended 31 December 2011 Gross profit Add: OPERATING INCOME 75,000 Discount received 60,000 Rent received 20,000 Bad Debts recovered 15,000 Interest received 3,000 Commission received 7,600 3,900 184,500 90,000 5,900 4,800 3,700 400 2,000 12,000 3,700 TOTAL OPERATING INCOME 531,600 2,000 30,000 4,000 10,000 50,000 96,000 627,600
- Buildings - Furniture Postage Legal fees Petty cash expenses Sundry expenses FINANCIAL EXPENSES Bad debts Discount allowed Interest paid Doubtful debts TOTAL OPERATING EXPS NET OPERATING PROFIT
9,700 3,600 2,000 900 500 2,000 141,200 1,600 400 15,000 3,000 20,000 345,700 281,900 627,600 NET OPERATING PROFIT Add: NON-OPERATING INCOME Rent Damages received in court case Gain on sale of fixed assets TOTAL REVENUES 31,000 375,800 406,800
627,600 281,900
Less: NON-OPERATING EXP Loss on Sale of Fixed assets Donation Losses by fire Theft Damage paid in court cases NET PROFIT 5,000 14,000 2,000 10,000
406,800
Profit and Loss Statement of Karan for the year ended 31st December 2011 Sales Less: Sales returns NET SALES LESS COST OF GOODS SOLD Opening stock Add: Purchases Less: Purchases returns Drawings NET PURCHASES Add: Other Expenses Buying expenses Duty Cartage Inwards Wharfage Total Goods available for sale Less: closing stock COST OF GOODS SOLD Gross Profit Add: Operating Income Discount received Interest received Bad debts recovered TOTAL OPERATING INCOME Less: OPERATING EXPENSES Selling & Distribution Expenses Advertising Cartage Outwards Salesmens salaries Salesmens commission Motor vehicle expenses Depreciation - Motor vehicles - Shop fittings Wharehouse houses Office & Administrative Expenses Office salaries Electricity 10,00 0 50,00 0 375,000 2,500 372,500
8,900 290,000
60,000 230,000
16,500 179,800
12,000 900 20,000 2,000 3,000 500 200 1,000 39,600 30,000 2,900
Telephone Postage & stationery Legal fees Rent paid Petty cash expenses Depreciation - Buildings - Equipment - Furniture Financial Expenses Bad debts Discount allowed Interest paid TOTAL OPERATING EXPENSES Net Operating Profit (Loss) Add: Non- Operating Gains Rent Gain on sale of fixed assets Damages from court case Less: Non-Operating Expenses Damages paid for court case Donations Loss on sale of assets Theft Net Profit (Loss)
1,900 290 900 12,000 450 4,000 2,900 1,800 57,140 200 190 6,000 6390 103,130 76,670
53,900 130,570
Illustrative example (3) - Traditional Format of Balance Sheet Balance Sheet of Karan as at 31 October 2012
Current Liabilities Creditors Expenses due Income in advance Bank overdraft Non Current Liabilities Debentures Loan Mortgage Proprietorship Capital Add: Net Profit Add: Additional Capital Less: Drawings
Current Assets Cash on hand Cash at bank Closing stock Debtors - Bad debts Less: Prov. For D. Debts Prepayments Income due
500 45,900 38,000 60,000 5,800 54,200 590 4,000 143,19 0 80,000 190,000 18,000 172,000 90,000 18,000 72,000 96,000 4,900 91,100 120,000 20,000 100,000 515,100
Non Current Assets 420,000 543,600 Land Buildings (cost) 250,000 Less: Accum. Depn 120,000 370,000 Motor vehicles (cost) 50,000 Less: Accum. Depn 420,000 170,310 Furniture (cost) Less: Accum. Depn 249,690 Equipment (cost) Les: Accum. Depn
100,000
793,290
Proprietorship
Capital Add: Net Profit Less: Drawings This is represented by Current Assets Cash on hand Cash at bank Closing stock Prepayments Income due Debtors Current Liabilities Creditors Expenses due Income in advance Working Capital Add: Fixed Assets Land Buildings (cost) Less: Accum. Depn Furniture (cost) Less: Accum. Depn Equipment (cost) Less: Accum. Depn
500 29,000 12,000 5,900 2,900 12,700 63,000 20,000 3,700 2,800 26,500 36,500
120,000 190,000 10,000 180,000 98,000 3,000 95,000 120,000 40,000 80,000 475,000