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ZIMSEC O Level Principles of Accounts Notes: Trading and Profit and Loss Account Example
From the following trial balance of S Madondo, extracted after one year’s trading, prepare a trading and profit and loss account for the year ended 31 December 20X6. A balance sheet is not required.
| DR | CR | |
|---|---|---|
| $ | $ | |
| Sales | 190576 | |
| Purchases | 119832 | |
| Salaries | 56527 | |
| Motor expenses | 2416 | |
| Rent | 1894 | |
| Insurance | 372 | |
| General expenses | 85 | |
| Premises | 95420 | |
| Motor vehicles | 16594 | |
| Debtors | 26740 | |
| Creditors | 16524 | |
| Cash at bank | 16519 | |
| Cash in hand | 342 | |
| Drawings | 8425 | |
| Capital | 138066 | |
345166 | 345166 |
Insert table here
- Stock at 31 December 20X6 was $12,408
Solution
S Madondo
Trading and Profit and Loss Account for the year ended 31 December 2016
| $ | $ | |
|---|---|---|
| Sales | 190576 | |
| Less Cost of Goods Sold: | ||
| Purchases | 119832 | |
| Less closing stock | (12,408) | |
(107,424) |
||
| Gross Profit | 83152 | |
| Less Expenses: | ||
| Motor expenses | 2416 | |
| Rent | 1894 | |
| Insurance | 372 | |
| General expenses | 85 | |
| Salaries | 56527 | |
(61,294) |
||
| Net Profit | 21858 |
To access more topics go to the Principles of Accounts Notes.
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