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Trading and Profit & Loss Account

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Presentation on theme: "Trading and Profit & Loss Account"— Presentation transcript:

1 Trading and Profit & Loss Account
Accounting Cycle Transaction Journal Entries Ledger Trial Balance Trading and Profit & Loss Account Balance Sheet

2 illustration T- 1: Bharath started business with the investment of Rs.1,00,000 Journal Entries in the Books of Bharath Enterprises Debit Credit J-1:By.Cash A/C Dr. 1,00,000 To. Capital A/C 1,00,000 (Being money invested in business by Mr.Bharath by cash)

3 Continue….2 T-2: On the next day he has deposited Rs.50,000 in the Bank. Debit Credit J-2: Bank A/C Dr ,000 To. Cash A/C ,000

4 Continue….3 T-3: He has purchased a machinery for Rs.10,000 and paid cash immediately J-3: Machinery A/C Dr. 10,000 To.Cash A/C ,000

5 Continue…..4 T-4: He has purchased another machiery for Rs.5,000 and issued cheque immediately. J-4: Machinery A/C Dr. 5,000 To. Bank A/C ,000

6 Continue…5 T-5: Purchased furniture for Rs.2,000 and paid Cash immediately. J-5: Furniture A/C Dr. 2,000 To.Cash A/C ,000

7 Continue ..6 T-6: Purchased a building for Rs.20,000 and issued cheque immediately. J-6: Building A/C Dr. 20,000 To.Bank A/C ,000

8 Continue…7 T-7: Purchased Rawmaterial for Rs.3000 and paid Cash immediately. J-7: Purchase A/C Dr. 3,000 To. Cash A/C ,000

9 Continue…8 T-8: Purchased Rawmaterial from Ravi&Co. for 1,000
J-8: Purchase A/C Dr. 1,000 To.Ravi&Co.A/C ,000

10 Continue…9 T-9: Paid Cash to Ravi & Co Rs.990 towards full and final settlement. J-9: Ravi & Co A/C Dr To.Cash A/C To.Discount A/C

11 Continue…10 T-10: Bought a Second hand computer for Rs.2000 and paid Cash immediately J-10: Office Equipment A/C Dr. 2,000 To.Cash A/C ,000

12 Continue..11 T-11: Purchased 4 tube lights each Rs.200
And 4 fans each Rs.800 from Rathna Fans House and paid cash immediately. J-11: Fixtures A/C Dr. 4,000 To.Cash A/C ,000

13 Continue..12 T-12: Goods Sold to Rathna Stores for Rs.20,000 and received cash immediately. J-12: Cash A/C Dr. 20,000 To.Sales A/C ,000

14 Continue..13 T-13: Goods sold to Saravana Stores for Rs.25,000 and received cheque immediately. J-13: Bank A/C Dr. 25,000 To. Sales A/C ,000

15 Continue..14 T-14: Goods sold to Vivek & Co for Rs.20,000
J-14: Vivek & Co A/C Dr. 20,000 To.Sales A/C ,000

16 Continue..15 T-15: Telephone Charges Paid Rs.1000
( Since the mode of payment is not mentioned here we have to treat this as cash payment) J-15: Telephone Charges A/C Dr.1,000 To.Cash A/C ,000

17 Continue..16 T-16: Salary paid to Mr.Kumar Rs.1000
J-16: Salary A/C Dr. 1,000 To. Cash A/C ,000

18 Continue…17 T-17: Wages paid to Mr.Ravi Rs.500 J-17: Wages A/C Dr. 500
To.Cash A/C

19 Continue…18 T-18: Received Commission Rs.500 from Sekar.
J-18: Cash A/C Dr. 500 To.Commission A/C

20 Ledger --------------- -------------- 1,20,500 1,20,500 Cash A/c
To. Capital 1,00, By. Bank ,000 To. Sales , By. Machinery 10,000 To. Commission By. Furniture ,000 By. Purchase ,000 By. Ravi& Co By. Equipment 2,000 By. Fixtures ,000 By. Tel. Charges 1,000 By. Salary ,000 By. Wages By. Bal. C/d ,010 1,20, ,20,500 To. Bal. B/d ,010

21 Ledger By. Cash 1,00,000 Next Step
Capital A/c By. Cash 1,00,000 Next Step To. Bal. C/d 1,00, By. Cash 1,00,000 Capital A/C To. Bal. C/d 1,00, By. Cash 1,00,000 1,00, ,00,000 By. Bal. B/d 1,00,000

22 Ledger Bank A/c To. Cash 50,000 By. Machinery 5,000 To. Sales 25,000 By. Building 20,000 By. Bal. C/d 50, ,000 75, To. Bal. B/d 50,000

23 Machinery A/c Ledger To. Cash 10,000 By. Bal. C/d 15,000
To. Bank ,000 15, ,000 To. Bal. B/d ,000 Furniture A/c To. Cash , By. Bal. C/d ,000 2, ,000 To. Bal. B/d ,000

24 Trial Balance Trial Balance To.Cash 46,010 By. Capital 1,00,000 To. Bank 50,000 By. Sales 65,000 To. Machinery 15,000 By. Commission 500 To. Furniture 2,000 By. Discount 10 To. Building 20,000 To. Office Equipment 2,000 To. Fixtures 4,000 To. Vivek & Co 20,000 (Debtors) To. Salary 1,000 To. Wages 500 To. Tele. Charges 1,000 To. Purchases 4, ,65,510 1,65,510

25 Trading & Profit and Loss A/c
Trading Account To. Op.Stock By.Sales ,000 To. Purchases 4, By. Cl.Stock To. Gross Profit 61,000 65, ,000 Profit and Loss By.Gross Profit 61,000

26 Profit and Loss A/c By.Gross Profit 61,000
To. Salary , By. Commission To. Wages By. Discount To. Tele ,000 To. Net Profit 59,010 61, ,510

27 Balance Sheet Liabilities Assets Capital 1,00,000 Fixed Assets
Net Profit 63, ,63, Building ,000 Machinery ,000 Furniture ,000 Office Equipment ,000 Fixtures ,000 Current Assets Cash ,010 Bank ,000 Debtors ,000

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