Drawing 10000 machinery 50000 stock 25000 prepare trading account n profit n loss account
Answers
Answer:
trading and profit and lose a/c
drawing is shown in a liability side of balance sheet
machinery is an asset so it will be shown on asset side of balance sheet
stock opening and closing shown in trading a/c
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Answer:
To prepare the Trading Account and Profit and Loss Account, we need to know the following information:
Sales
Cost of goods sold
Gross profit
Operating expenses
Net profit
Based on the information given in the question, we can assume that the figures provided are the balances of relevant accounts at the end of the accounting period.
Let's start with the Trading Account:
Trading Account for the year ended [date]
Sales XXXXX
Less: Cost of goods sold
Opening stock XXXXX
Add: Purchases XXXXX
Less: Closing stock XXXXX
Cost of goods sold XXXXX
Gross profit XXXXX
The figures given in the question are:
Opening stock = 25,000
Purchases = ?
Closing stock = 50,000
We need to find out the purchases figure to calculate the cost of goods sold. We can do this by using the following formula:
Purchases = Cost of goods sold + Closing stock - Opening stock
Substituting the figures given in the question, we get:
Purchases = 25,000 + 50,000 - 25,000
Purchases = 50,000
Now we can complete the Trading Account:
Trading Account for the year ended [date]
Sales XXXXX
Less: Cost of goods sold
Opening stock XXXXX
Add: Purchases XXXXX
Less: Closing stock XXXXX
Cost of goods sold 25,000
Gross profit XXXXX
To calculate the Gross profit, we need to subtract the cost of goods sold from sales. Let's assume the sales figure is also given in the question:
Sales = 10000
Trading Account for the year ended [date]
Sales 10000
Less: Cost of goods sold
Opening stock 25000
Add: Purchases 50000
Less: Closing stock 50000
Cost of goods sold 25000
Gross profit (15000)
The Gross profit is negative, which means that the cost of goods sold is higher than the sales. This could indicate a loss on the Trading Account. Let's move on to the Profit and Loss Account to confirm this:
Profit and Loss Account for the year ended [date]
Gross profit/(loss) (15000)
Less: Operating expenses
Total operating expenses XXXXX
Net profit/(loss) XXXXX
The figures given in the question do not provide any information about the operating expenses, so we cannot calculate the Total operating expenses or the Net profit/(loss).
However, based on the figures we have calculated so far, it appears that the company has incurred a loss of 15,000.
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