1. Profit and Loss Account

2. Starter Working on your own
Draw a line to match the component of the trading account to it’s Definition
Review your answers

3. Lesson Objective
P4 Explain the component parts of a profit and loss account in a given organisation

4. Lesson Outcomes
Identify the key components of a Profit and loss account (individual)
Describe the key components of a profit and loss account to a partner(Pairs)
Review definition and purpose of Profit and loss account for Bombay stores (whole class)
Identify the calculations used in a Profit and loss account. (group)
Create a profit and loss account for Bombay stores (individual)
Identify whether Bombay Stores are making a profit or loss (individual), and discuss in groups
Complete Assignment 2 Task 1 a-c

5. Task 2 Working in your learning partner groups
Find out the calculations required to determine the Gross Profit of any business
Complete the work sheet.
Review answers

6. Interim Plenary Profit and loss account explaining game
With a partner each have 3 mins to explain what a profit and loss account is, it’s purpose component parts and calculations used in the account

7. What I need to Do?
Task 1 
Explain what the purpose and use of a Profit and Loss account is for Bombay Stores
Discuss what is meant by a Trading account, gross profit, net profit and transfer of net profit to balance sheet and explain how they are calculated
Using the information given below produce a Profit and Loss account for Bombay Stores.
Sales £140150
Purchases £32300
Wages £8700
Rent £10200
Heat & Light £1100
Motor Expenses £3400
Insurance £700
Bank Charges £550
Other overheads £2100

8. Pupils Plan

9. Create- design, plan and produce
DEFINE
Clearly explain what a particular term means and give an example, if appropriate, to show what you mean.
Plan of Action
Define what a profit and loss account is
It’s purpose, why created, used for, by whom
Explain the component parts of a trading account and how the figures are calculated
Create a Profit and Loss account for Bombay stores
Create- design, plan and produce
EXPLAIN- More difficult than describing or listing
Set out in detail the meaning of something, with reasons. so it can help to give an example to show what you mean. Start by introducing the topic then give the ‘how’ or ‘why’.

10. Plenary Write down 3 things you have learn’t today
2 things you are not sure about
1 way you can link what you have done today to the next lesson

11. Homework Find out and write down:-
what the purpose and use of a balance sheet is.
what is meant by :-
Fixed assets,
current assets,
Long-term liabilities,
current liabilities,
working capital,
transfer of net profit from profit and loss account and capital employed

12. Homework Sheet Find out and write down:-
what the purpose and use of a balance sheet is.
Purpose
Use(s)
what is meant by :-
Fixed assets,
current assets,
Long-term liabilities,
current liabilities,
working capital,
transfer of net profit from profit and loss account and capital employed