Final Accounts of Trading Concern

FINAL ACCOUNTS OF TRADING CONCERN

1. Gross Profit =Net Sales – Cost of goods sold

Net sales =

Total Sales – Sales Returns or Returns inward

Cost of Goods sold =

Opening Stock + Net Purchases + Direct expenses - Closing Stock

Net Purchases =

Total purchases – Purchases returns or returns outward

Direct Expenses =

Purchasing expenses for goods + Manufacturing Expenses

D i r e c t  E x p e n s e s

			Purchasing expenses for goods					Manufacturing Expenses
			1.	Carriage OR Carriage Inward OR Carriage			1.	Coal, Gas, Steam, Water, Fuel, Power
				on purchases OR Carriage & Cartages.
			2.	Freight OR Railway Freight			2.	Excise duty
			3.	Octroi			3.	Productive Expenses
			4.	Royalty			4.	Wages OR Wages & salary
			5.	Import duty			5.	Factory lighting
			6.	Custom duty			6.	Factory Heating
			7.	Dock charges			7.	Factory Rent, Rates, Taxes and Insurance
			8.	Clearing charges			8.	Other Factory Expenses
			9.	Unloading Charges			9.	Haulage
			10.	Order placement expenses			10.	Factory manager or Works Manager salary
							11.	Factory worker’s / staff’s salary
							12.	Stores Overheads
							13.	Oiling and Cleaning of Machines
							14.	Technical Directors Fees

2. Net Profit =

Gross profit + All Incomes + All Gains OR Profits - Indirect expenses – All Losses

Incomes

Gains

Indirect expenses

Losses

Operating Expenses

Non

Office and

Selling and

Operating

Distribution

Administrative

Expenses

Expenses

Expenses

Commission

Profit on sale of

Salaries &

Carriage

Loss on sales of

Interest on loan

Received A/c

Assets

Wages

outward

fixed Assets

Discount

Profit on sale of

Rent, rates &

Carriage on

Interest on

Loss on Sales of

Received A/c

investments

Taxes

sales

capital

Investments

Interest

Bad debts

Printing &

Loading

Donations

Bad Debts

Received A/c

recovered

Stationery

Charges

Rent Received

Grant received

Lighting

Advertisement

Charity

Loss by fire

Interest on

Insurance

Commission

Finance

Loss by theft

Investments

premium

Charges

Dividends on

Telephone

Brokerage

Loss by

Shares

Charges

accidents

Tax refund

Legal charges

Export duty

Interest on

Audit fees

packing charges

drawings

Establishment

Delivery van

exp.

exp.

Trade exp.

Stable exp.

Discount

General Charges

allowed

Bank Charges

Agent’s Salary

Postage &

Sales tax

Telegrams

Depreciation on

Depreciation on

Sales

office’s Fixed

Department’s

Assets

Fixed Assets

Repairs &

Entertainment

Maintenance

Expenses

Director fees

Sales Promotion

Expenses

Trading and Profit & Loss Accounts (For the year ended …..)

Dr.					Cr.
Particulars		Amounts	Particulars		Amounts
To Opening Stock		XXX	By Sales	XXX
To Purchases	XXX		(-) Sales Returns	(XXX)	XXX
(-) Purchases returns	(XXX)
(-) Dis. on purchases	(XXX)	XXX
To Direct Expenses		XXX	By Goods withdrawn by Owner*		XXX
To Gross profit c/d		(B/F)	By Goods distributed as sample*		XXX
*These items, alternatively			By Goods gave as charity*		XXX
			By Goods lost*		XXX
deducted from purchases.			By Closing Stock		XXX
			By Gross loss c/d		(B/F)
Total		XXX	Total		XXX
To Gross loss b/d		XXX	By Gross profit b/d		XXX
To Indirect Expenses		XXX	By All Incomes		XXX
To All Losses		XXX	By All Gains & profits		XXX
To Net Profit		(B/F)	By Net Loss		(B/F)
(Transferred to Capital A/c)			(Transferred to Capital A/c)
Total		XXX	Total		XXX

Balance Sheet (As on ……………………)

Liabilities

Amounts

Assets

Amounts

Bank overdraft

XXX

Cash in Hand

XXX

B/P

XXX

Cash at bank

XXX

Creditors

XXX

Debtors

XXX

Outstanding Expenses

XXX

B/R

XXX

Advance Income

XXX

Closing Stock:

XXX

Loans

XXX

Prepaid Expenses

XXX

Bank Loans

XXX

Accrued Incomes

XXX

Capital

XXX

Investments

XXX

(+) Additional Capital

XXX

Loan and Advances

XXX

(+) Interest on Capital

XXX

Goodwill

XXX

(+) Net Profit

XXX

Land and Building

XXX

XXX

Plant & Machinery

XXX

(-) Drawings

(XXX)

Furniture, Fixtures & Fittings

XXX

(-) Interest on Drawings

(XXX)

Car

XXX

(-) Net Loss

(XXX)

XXX

Loose Tools

XXX

Patents right

XXX

Copy right

XXX

Trade Mark

XXX

Total

XXX

Total

XXX