Trading Account
(for the period ending December 31, 2015)
Dr.                                                                                                                                                     Cr.
| Expenses/Losses | Amount $ | Revenue/Gain | Amount $ |
| To Opening StockOr
Stock (1-1 -2012 or opening date of accounting period) or Stock in the beginning or
To Stock: Raw material… …………. . Work in progress or Semi finished goods or Partly manufactured goods Finished Goods
To Purchases Less : Purchases return Or Returns outward Less : Goods taken by proprietor (if in adjustment) Less : Goods given as charity (if in adjustment) Less : Goods given as free sample (if in adjustment)
To Carriage or cartage or Carriage inward or Carriage on purchases or Carriage and freight
To Octroi or local taxes
To Import duty, customs, Landing charges. clearing charges
To Wages or productive Wages or manufacturing Wages or direct wages or wages and salaries
To Coal gas and water
To Fuel
To Heating and Lighting To Power or motive power To Manufacturing expenses To Consumable stores To Packing charges To Assembling expenses To Direct expenses To Factory Expenses To Productive expenses To “Royalty To Gross Profit transferred to PIL A/c. (If credit side exceeds The debit side)
|
By SalesLess : Sales return
Or Returns inward
By Closing stock Or Stock on 31-12-2012 Or Stock at the end of the year Or By Stock : Raw material Work in progress Finished goods By Gross loss-transferred to PIL A/c (If debit side exceeds 1he credit side)
|
Illustration 1.Prepare trading account only from the following Trial balance of Chinese Corner Hotel as on 31st March, 2003:
Dr.                              Cr.
$Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $
Purchases ………… ……………………………………………………………. .15750
Sales ………………………………… ………………… ……………. …… .                                               21000
Returns inward …………………………………………………… …………….. .600
Opening stock …………………………………………………. ….. ………. .1300
Freight outward ……….. ………………. …………………………. ………… .65
Carriage inward ……………………………. ……………………………………. .50
Salaries and wages …………………….. ……………………………………… .572
Rent and taxes …………………………………………………………………… .226
Travelling expenses ……………………………………………………………. .187
Discount …………………………………………………………………………… .115
Commission ……………………………………………………………………… .108
Bank A/c ………………………………………………………………………… .6647
Trade Creditors ……………………………………………………….. .                                                  2700
Sundry debtors ……………………………………………………….. ………4380
Capital A/c …………………… ……………………………………….. .                                                  20000
Drawings A/c …………………………………………………. ……………… .2000
43700Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 43700Â
Closing Stock was estimated at $ 12.000.
Solution: Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Trading Account of Chinese Corner Hotel
                                    For the year ended 31st March, 2012
| Expenses/Losses | Amount $ | Revenues/Gain | Amount $ |
| To Opening Stock
To Purchases To Carriage Inward To Gross Profit transferred to P/L N/c
|
13000
15750 50 3600
|
By Sales                  2100
Less : Returns      600
By Closing Stock
|
20400
12000
|
| 32400 | 32400 |
Notes: All direct expenses appearing in trial balance are collected from Trading account assets, liabilities and indirect expenses such as, rent, taxes, wages, salaries, freight outward are placed in the Profit and Loss account. Indirect expenses are entered in the debit side of Profit and Loss account since these are done to increase sale rate.
Capital, creditors and returns are placed in the liability side and Drawings, debtors and returns are placed under assets.
Links of Previous Main Topic:-
- Balance sheet in final accounts without adjustments
- Difference between profit and loss accounts and balance sheet
- Features or characteristics balance sheet
- Limitations of final accounts or financial statements
- Meaning of financial statements or final accounts
- Need or importance and purpose of trading account
- Need or purpose and importance of profit and loss account
- Performa of balance sheet
- Performa profit loss account
Links of Next Accounting Topics:-
