Trading and Profit & Loss Account

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Presentation transcript:

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

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)

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. 50,000 To. Cash A/C 50,000

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 10,000

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 5,000

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 2,000

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 20,000

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 3,000

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 1,000

Continue…9 T-9: Paid Cash to Ravi & Co Rs.990 towards full and final settlement. J-9: Ravi & Co A/C Dr. 1000 To.Cash A/C 990 To.Discount A/C 10

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 2,000

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 4,000

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 20,000

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 25,000

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 20,000

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 1,000

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

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

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

Ledger --------------- -------------- 1,20,500 1,20,500 Cash A/c To. Capital 1,00,000 By. Bank 50,000 To. Sales 20,000 By. Machinery 10,000 To. Commission 500 By. Furniture 2,000 By. Purchase 3,000 By. Ravi& Co 990 By. Equipment 2,000 By. Fixtures 4,000 By. Tel. Charges 1,000 By. Salary 1,000 By. Wages 500 By. Bal. C/d 46,010 --------------- -------------- 1,20,500 1,20,500 ----------------------------------------------------------------------------------- To. Bal. B/d 46,010

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

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 ------------- ----------- 75,000 75,000 ------------------------------------------------------------------ To. Bal. B/d 50,000

Machinery A/c Ledger To. Cash 10,000 By. Bal. C/d 15,000 To. Bank 5,000 ------------- -------------- 15,000 15,000 To. Bal. B/d 15,000 Furniture A/c To. Cash 2,000 By. Bal. C/d 2,000 ----------- ----------- 2,000 2,000 ------------------------------------------------------------------------------------- To. Bal. B/d 2,000

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 4,000 -------------------------------------------------------------------------- 1,65,510 1,65,510

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

Profit and Loss A/c By.Gross Profit 61,000 To. Salary 1,000 By. Commission 500 To. Wages 500 By. Discount 10 To. Tele 1,000 To. Net Profit 59,010 --------------------------------------------------------------- 61,510 61,510

Balance Sheet Liabilities Assets Capital 1,00,000 Fixed Assets Net Profit 63,010 1,63,010 Building 20,000 Machinery 15,000 Furniture 4,000 Office Equipment 2,000 Fixtures 4,000 Current Assets Cash 46,010 Bank 50,000 Debtors 20,000