Non-Trading Concern Subscription Account Calculations: 1. Calculation of Subscription: Subscription received Less: Last year arrear 4900 300 4600 200 4800 700 5500 500 5000 Add: Current year arrear Add: Last year advance Less: Advance for next year 2. Calculation of Bar Purchase: Paid to Bar creditors Less: Last year creditor Detail $ Arrear B/D Income and Expenditure account Advance C/D 300 5000 Detail Advance B/D Cash / Bank Arrear C/D 500 5800 700 4900 200 5800 6000 1500 4500 2500 7000 Add: Current year Creditor 3. Calculation of Expenses: Wages paid Less: last year owing 1000 300 700 500 1200 100 1300 200 1100 Add: Current year owing Add: Last year advance Less: Current year advance 4. Calculation of Depreciation : Opening balance Add: New Purchase Detail Advance B/D Cash / Bank Creditor/ Owing C/D $ 100 1000 500 Detail $ Creditor/ Owing B/D Income & Expenditure account Advance C/D Less: Closing balance 5. Calculation of Accumulated: Opening Assets: Opening bank balance Add: Furniture Equipment Stock Debtors Subscription in arrear Advance wage expenses 250 2000 3000 4000 2250 300 100 11900 1500 2500 300 700 300 1100 200 1600 1600 3000 2000 5000 1000 4000 3500 500 Less: Sale of Old assets (Cost) Less: Opening Liabilities Creditors Loan Wages owing Advance Subscription $ 5000 Page 1 6900 Chittagong Sports Club Bar Trading & P/L account for the year ended 31 December 1999 Particular/ Details $ $ Sale 7500 Less: Cost of Bar sold: Opening Inventory 2000 Purchase 7000 9000 Less: Closing Inventory 2500 6500 Gross profit 1000 Less: Bar wages 500 Net profit from Bar 500 Chittagong Sports Club Income and Expenditure account for the year ended 31 December 1999 Particular/ Details $ $ Income: Subscription 5000 Donation 2000 Entrance fee 1500 Profit from Bar 500 Other Income 200 9200 Less: Expenditure Wages and Salaries Rent and rates Lighting Printing and Stationery Repair and Maintenance Depreciation: Sports equipments Furniture Surplus of Income over expenditure 1200 500 300 800 200 500 1000 4500 4700 Page 2 Chittagong Sports Club Balance Sheet for the year ended 31 December 1999 Particular/ Details Cost Dep. Net Non Current Assets / Fixed Assets: Sports Equipment Furniture 4000 500 3500 10000 1000 9000 15000 1500 12500 Current Assets Cash in hand 200 Bank balance 1800 Trade Receivable / Debtors 1500 Closing Inventory of Bar 2500 Subscription arrear Prepaid expenses 200 200 6400 Less: Current Liabilities Trade Payable / Creditors Expenses owing Subscription advance Working Capital Net Assets / Net worth Finance by: Accumulated Fund Add: Surplus of Income Gift (For Purchase of Assets) Bank loan 2500 500 500 3500 2900 15400 6900 4700 11600 3000 2200 15400 Page 3 Partnership Final Account John & Brown Profit and loss Appropriation account For the year ended 31 December 1999 Particular $ Profit for the year / Net Profit Add: Interest on drawings John Brown Less: Appropriation Interest on Capital: John Brown Salary John Brown Bonus John $ $ 34500 100 200 1000 2000 3000 2800 3000 5800 1000 Balance of Profit Share : John (2/5) Brown(3/5) 10000 15000 300 34800 9800 25000 25000 Partners Current Account Particulars Drawings Interest on drawings Stock taken Balance c/d John 3000 100 11900 15000 Brown Particulars 4000 Balance b/f 2000 Interest on capital 1000 Salary Bonus 15100 Share of net profit 20300 Balance b/d John 200 1000 2800 1000 10000 15000 11900 Brown 300 2000 3000 Page 4 15000 20300 15100 John and Brown Balance Sheet for the year ended 31 December 1999 Particular/ Details Cost Dep. Net Non Current Assets Building 33000 2200 19800 ,Furniture 22000 3300 29700 55000 5500 49500 Current Assets Trade Receivable 7000 Less: Provision for bad debts (700) Closing Inventory 6300 15000 Prepaid expenses 700 Cash in hand 200 Bank balance 1800 24000 Less: Current Liabilities Trade Payable / Creditors Expenses owing Bank Overdraft Working Capital / Net Current 2500 500 3000 (6000) 18000 asset Net Assets / Net Worth 67500 Finance by: Capital: John Brown Current a/c: John Brown 10000 20000 11900 15100 30000 26000 67500 Single Entry / Incomplete Records Calculation of Opening & Closing Capital Page 5 1st January $ $ Particulars 31st December $ $ Assets Equipment Furniture Cash in Hand Bank balance Debtors Closing Stock Prepaid expenses 5000 2000 1000 2000 1500 2000 500 14000 4500 1500 5000 3500 3000 5000 200 22700 Less: Current Liabilities: Creditors Bank overdraft Expenses owing Loan 2000 1100 900 2000 Capital (6000) 8000 Mr. Brown Profit and Loss Statement for the Year ended 31 December 1999 Particulars $ Closing Capital Add: Drawing Cash 2500 Goods 500 Less: Opening Capital Additional Capital Depreciation Other expenses Profit for the year (Net Profit) 8000 2000 500 500 2500 500 700 7000 (10700) 12000 $ 12000 3000 15000 11000 4000 Page 6 Single Entry conversion into Double Entry Calculations: 1) Calculation of Sale: Closing debtors balance Add: Discount allowed Add: Return Inward Add: Bad debts Add: Received from debtors Less: Opening Debtors balance Credit Sale Add: Cash Sale Total Sale 2) Calculation of Purchase: Closing Creditors Add: Discount received Add: Return Outwards Add: Paid to Creditors Less: Opening Creditors Credit Purchase Add: Cash Purchase Total Purchase 2500 200 1000 1200 4100 9000 2000 7000 1000 8000 6000 200 500 2000 8700 2500 6200 1500 7700 Page 7 3) Calculation of Expenses: Wages paid Less: Last year owing 1000 300 700 500 1200 Add: Current year Owing 4) Calculation of Depreciation: Opening balance Add: New purchase 3000 2000 5000 4500 50 Less: Closing balance 5) Calculation of Closing Bank balance: Opening balance 3000 Add: Received 12000 15000 Less: Payments 8000 7000 6) Calculation of Opening capital: Opening Assets Add: Furniture Motor Vehicles Stock Debtors Prepaid expenses Less: Opening Liabilities Creditor Loan 2000 5000 6000 6000 2000 500 21500 1500 2500 300 4300 17200 Page 8 Sole Traders Financial Statement Mr. Brown Income Statement (Trading and profit and loss account) For the year ended 31 December, 1999 Sales / Revenue 100000 Less: Sales return Sales discount Add: Unrecorded Sales 7000 3000 8000 (10000) 8000 98000 Less: Cost of Sale / Cost of goods sold: Opening Inventory / Stock Purchase Less: Return outwards Purchase discount Stock taken by proprietor / Goods withdraw Add: Carriage inwards 5000 60000 (1000) (2000) (500) 2000 Carriage in / Fright in / Transportation in 58500 500 64000 (15000) Less: Closing Stock / Inventory Gross profit Add: Provision for bad debts (old) Add: Discount received Add: Interest received Add: Any other income (except sale) (49000) 49000 300 200 100 100 49700 Less: Operating expenses / All other Expenses: Salaries Add: owing Insurance Less: prepaid Repairs and maintenance Rent and rates Selling expenses Audit fee Printing and stationery Telephone expenses Wages / Labour Other office expenses Carriage outwards Discount allowed Bad debts Provision for bad debts (new) 1500 500 1900 (700) 2000 1200 500 200 300 1000 200 500 1000 300 500 200 800 700 Page 9 Interest on loan / finance charge Depreciation : Furniture Buildings Net profit / Profit for the year 300 2200 3300 15200 34500 Mr. Brown Balance Sheet As at 31 December, 1999 Particular/ Details Cost Dep. Net Non Current Assets / Fixed Assets : Building Furniture 33000 22000 55000 (3300) (2200) (5500) 19800 29700 49500 Current Assets: Debtors / Trade receivable / Account receivable Less: Provision for bad debts Closing Inventory Prepaid Insurance Cash in hand Bank balance Total Assets Capital and Liabilities Less: Current Liabilities Creditors /Trade Payable / Account payable Wages Owing Bank Overdraft Working Capital Net Worth 7000 700 2500 500 3000 6300 15000 700 200 1800 24000 123000 6000 18000 67500 Finance by: Capital Add: Profit for the year (Net Profit) Less: Drawing cash Drawings of Goods Bank Loan 30000 34500 64500 11500 1000 12500 52000 15500 67500 Page 10 Manufacturing Account Mr. Brown Manufacturing Account for the year ended 31 December 1999 Particular/ Details Opening inventory of raw materials Purchase of raw materials Add: Carriage Inwards Less: Return Outwards Less: Sale of scrap material Less: Closing inventory of raw materials $ $ 2000 60000 1200 61200 1000 60200 200 60000 62000 12000 Raw material used/consumed Add: Direct Expenses Manufacturing / Direct wages Direct expenses 50000 25000 10000 Prime cost Add: Factory Overhead: Factory wages and salary Factory Insurance Repairs and maintenance Factory rent and rates Other Factory expenses Dep: Factory Machinery Factory Building Factory Cost Add: Opening Inventory of work in progress Less: Closing Inventory of work in progress Cost of production $ 12000 1000 2500 2500 2000 2200 3300 35000 85000 25500 110500 2500 113000 3000 110000 Page 11 Mr. Brown st Income Statement for the year ended 31 December 1999 Details $ Sales / Revenue Less: Sales return $ 200000 2000 $ 198000 Less: Cost of Sales / Cost of goods sold: Opening Stock / Inventory of Finished goods Cost of Production 5000 110000 115000 (15000) Less: Closing Stock / Inventory Gross profit Add: Provision for bad debts (old) Add: Discount received 100000 98000 500 200 98700 Less: Operating expenses / All other Expenses: Wages and Salaries Add: owing Insurance Less: prepaid Rent and rates Selling expenses Audit fee Printing and stationery Telephone expenses Other office expenses Carriage outwards Discount allowed Bad debts Provision for bad debts (new) Interest on loan Depreciation : Office Furniture Motor Vehicles Profit for the year (Net profit) 1500 500 2400 (700) 2000 1700 200 300 1000 200 500 300 500 200 800 700 300 2200 3300 14200 84500 Page 12 Mr. Brown Balance Sheet as at 31 December 1999 Particular/ Details Cost Dep. Net Non Current Assets / Fixed Assets: Motor Vehicle Office Furniture Factory Machinery Factory Building 33000 22000 22000 33000 110000 3300 2200 2200 3300 11000 29700 19800 19800 29700 99000 Current Assets: Debtors / Trade receivable / Account receivable Less: Provision for bad debts Closing Inventory : Raw materials WIP Finished Goods Prepaid Insurance Cash in hand Bank balance 7000 700 6300 12000 3000 15000 700 200 1800 39000 Less: Current Liabilities Creditors /Trade Payable / Account payable Wages Owing Bank Overdraft Net Current Assets / Working Capital Net Worth 2500 500 3000 (6000) 33000 132000 Finance by: Capital Add: Profit for the year (Net profit) Less: Drawing cash Bank Loan 30000 84500 114500 (12500) 102000 30000 Page 13 132000 Page 14 Limited Liability Company Account Rash Ltd. Profit and loss Appropriation account for the year ended 31 December 1999 Details Profit for the year (Net Profit) Less: Transfer to General Reserve Dividend: Proposed Ordinary Dividend Proposed Preference Dividend Interim Dividend paid Retained Profit for the year Add: Retained Profit B/F Retained Profit C/F $ $ 45000 20000 18000 1000 2000 41000 4000 15000 19000 Rash Ltd. Balance Sheet As at 31 December, 1999 Page 15 Particular/ Details Cost Dep. Net Non Current Assets / Fixed Assets: Motor Vehicle Office Furniture Factory Machinery Factory Building 33000 22000 122000 233000 110000 3300 2200 2200 3300 11000 29700 19800 119800 229700 399000 Current Assets: Debtors / Trade receivable / Account receivable Less: Provision for bad debts Closing Inventory Prepaid Insurance Cash in hand Bank balance 7000 700 6300 25000 700 200 1800 34000 Less: Current Liabilities Creditors /Trade Payable / Account payable Wages Owing Bank Overdraft Proposed Ordinary Dividend Proposed Preference Dividend Net Current Assets / Working Capital Net Worth 2500 500 3000 18000 1000 (25000) 9000 408000 Finance by: Share Capital: Authorized Capital 500000 ordinary shares of $1 each 20000 , 5% preference Share of $ 1 each 500000 20000 520000 Issued Share Capital: 300000 ordinary shares of $1 each 20000, 5% pref. Share of $1 each 300000 20000 Long Term Liabilities 6% Debenture Reserve and Surplus: General Reserve Add: Transfer Share premium Profit and loss Appropriation a/c (Retained profit) 320000 45000 10000 20000 30000 5000 8000 43000 408000 Page 16 Accounting Ratio 1. Sale = Cost of goods sold + Gross Profit 2. Sales turnover = Sale – Sales returns 3. Purchase = Cost of goods sold + Closing stock – Opening stock 4. Gross Profit = (a) Sales – Cost of goods sold (b) Net profit + Expenses (c) Sales × Margin% (d) Cost of goods sold × Markup% 5. Net profit = (a) Gross profit – expenses (b) Closing Capital + Drawing – Opening Capital 6. Cost of goods sold = (a) Opeing stock + purchase – Closing stock (b) Sales – Gross profit 7. Expenses = Gross Profit – Net Profit 8. Capital = Assets – Liabilities 9. Mark up % = 10. Margin % 11. Gross profit as a % of Sales 12. Net Profit as a % of Sale = Gross Profit Cost of Goods Sold ×100 Gross Profit ×100 Sales = Gross Profit Sales ×100 = Net Profit Sales ×100 Expenses Sales ×100 13. Expenses as a % of Sale = 14. Rate of Stock turnover = Cost of Goods Sold Average Stock Page 17 15. Working Capital = Current Assets – Current Liabilities 16. Working Capital Ratio = 17. Acid test ratio = 18. Debtors / Sales ratio = Debtors Sales ×12 19. Creditors / Purchase ratio = Creditor Purchase ×12 20. Capital Employed = Current Assets Current liabilities Current assets – Closing stock Current Liabilities – Bank O/D 21. Net Profit as a % of Capital Employed= 22. Shareholder Interest (a) Capital + Long term liabilities + Reserve and Surplus (b) Fixed Assets + Working Capital (c) Total Assets – Current Liabilities Net profit Capital Employed ×100 = Share capital + Reserve and surplus Page 18
