prepare the trading profit and loss account for the year ended 31st March 1999.
opening stock. 2,500
sales. 90,000
capital. 5,000
drawings. 500
purchases. 60,050
carriage inwards. 2,335
wages and salaries. 1,115
return inward. 700
return outward. 900
rent and rates. 750
communication expenses. 1,650
transport expenses. 350
buildings. 15,050
sundry expenses. 820
insurance. 760
debtors. 4,326
creditors. 3,750
cash. 4,820
bank. 8,942
loan. 6,300
fixtures 726
carriage outwards. 340
commission payable. 216
closing stock ¢2,050?
To prepare the trading profit and loss account for the year ended 31st March 1999, we need to calculate the various components. Here's the step-by-step process:
1. Calculate the Cost of Goods Sold (COGS):
COGS = Opening Stock + Purchases + Carriage Inwards - Return Outward - Closing Stock
COGS = 2,500 + 60,050 + 2,335 - 900 - 2,050
COGS = 62,935
2. Calculate the Gross Profit:
Gross Profit = Sales - COGS
Gross Profit = 90,000 - 62,935
Gross Profit = 27,065
3. Calculate the Total Expenses:
Total Expenses = Wages and Salaries + Rent and Rates + Communication Expenses + Transport Expenses + Sundry Expenses + Insurance
Total Expenses = 1,115 + 750 + 1,650 + 350 + 820 + 760
Total Expenses = 5,445
4. Calculate the Net Profit before Tax:
Net Profit before Tax = Gross Profit - Total Expenses
Net Profit before Tax = 27,065 - 5,445
Net Profit before Tax = 21,620
Now, we can prepare the trading profit and loss account:
Trading Profit and Loss Account for the Year Ended 31st March 1999
Sales 90,000
Less: Return Inward (700)
Net Sales 89,300
Cost of Goods Sold
Opening Stock 2,500
Purchases 60,050
Carriage Inwards 2,335
Less: Return Outward (900)
Less: Closing Stock (2,050)
(62,935)
Gross Profit 27,065
Expenses
Wages and Salaries 1,115
Rent and Rates 750
Communication Expenses 1,650
Transport Expenses 350
Sundry Expenses 820
Insurance 760
5,445
Net Profit before Tax 21,620
This trading profit and loss account shows the sales, cost of goods sold, gross profit, and total expenses. The net profit before tax indicates the final profit earned during the year.