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To solve this problem, let's create a detailed step-by-step solution for preparing the Trading Account and the Profit and Loss Account for Roshan Traders for the year ending on Chaitra 30, 2080.
### (1) Trading Account
The Trading Account helps us determine the Gross Profit or Loss by comparing the direct costs of goods sold with the sales revenue.
Step-by-Step Calculation:
1. Opening Stock: Rs. 20,000
2. Add Purchases: Rs. 1,25,000
3. Add Carriage Inward: Rs. 5,000
4. Add Wages: Rs. 40,000
5. Total Direct Costs:
[tex]\[ \text{Opening Stock} + \text{Purchases} + \text{Carriage Inward} + \text{Wages} = 20,000 + 1,25,000 + 5,000 + 40,000 = 1,90,000 \][/tex]
6. Less Closing Stock: Rs. 60,000
7. Cost of Goods Sold (COGS):
[tex]\[ \text{Total Direct Costs} - \text{Closing Stock} = 1,90,000 - 60,000 = 1,30,000 \][/tex]
8. Sales Revenue: Rs. 2,40,000
9. Gross Profit:
[tex]\[ \text{Sales} - \text{COGS} = 2,40,000 - 1,30,000 = 1,10,000 \][/tex]
So, the Trading Account calculations yield:
- Cost of Goods Sold (COGS): Rs. 1,30,000
- Gross Profit: Rs. 1,10,000
### (2) Profit and Loss Account
The Profit and Loss Account helps us determine the Net Profit by comparing all income sources to all expenses.
Step-by-Step Calculation:
1. Gross Profit: Rs. 1,10,000 (from Trading Account)
2. Add Rent Received: Rs. 33,000
3. Add Interest Income: Rs. 17,000
4. Total Income:
[tex]\[ \text{Gross Profit} + \text{Rent Received} + \text{Interest Income} = 1,10,000 + 33,000 + 17,000 = 1,60,000 \][/tex]
5. Less General Expenses: Rs. 10,000
6. Less Depreciation on Fixed Assets (10% of Rs. 2,50,000):
[tex]\[ 0.10 \times 2,50,000 = 25,000 \][/tex]
[tex]\[ \text{Depreciation} = 25,000 \][/tex]
7. Less Additional Wages Payable: Rs. 10,000
8. Less Expired Prepaid Insurance: Rs. 13,000
9. Less Stationery: Rs. 15,000
10. Total Expenses:
[tex]\[ \text{General Expenses} + \text{Depreciation} + \text{Wages Payable} + \text{Expired Prepaid Insurance} + \text{Stationery} = 10,000 + 25,000 + 10,000 + 13,000 + 15,000 = 73,000 \][/tex]
11. Net Profit:
[tex]\[ \text{Total Income} - \text{Total Expenses} = 1,60,000 - 73,000 = 87,000 \][/tex]
So, the Profit and Loss Account calculations yield:
- Total Income: Rs. 1,60,000
- Total Expenses: Rs. 73,000
- Net Profit: Rs. 87,000
### Summary:
- Trading Account:
- Cost of Goods Sold: Rs. 1,30,000
- Gross Profit: Rs. 1,10,000
- Profit and Loss Account:
- Total Income: Rs. 1,60,000
- Total Expenses: Rs. 73,000
- Net Profit: Rs. 87,000
### (1) Trading Account
The Trading Account helps us determine the Gross Profit or Loss by comparing the direct costs of goods sold with the sales revenue.
Step-by-Step Calculation:
1. Opening Stock: Rs. 20,000
2. Add Purchases: Rs. 1,25,000
3. Add Carriage Inward: Rs. 5,000
4. Add Wages: Rs. 40,000
5. Total Direct Costs:
[tex]\[ \text{Opening Stock} + \text{Purchases} + \text{Carriage Inward} + \text{Wages} = 20,000 + 1,25,000 + 5,000 + 40,000 = 1,90,000 \][/tex]
6. Less Closing Stock: Rs. 60,000
7. Cost of Goods Sold (COGS):
[tex]\[ \text{Total Direct Costs} - \text{Closing Stock} = 1,90,000 - 60,000 = 1,30,000 \][/tex]
8. Sales Revenue: Rs. 2,40,000
9. Gross Profit:
[tex]\[ \text{Sales} - \text{COGS} = 2,40,000 - 1,30,000 = 1,10,000 \][/tex]
So, the Trading Account calculations yield:
- Cost of Goods Sold (COGS): Rs. 1,30,000
- Gross Profit: Rs. 1,10,000
### (2) Profit and Loss Account
The Profit and Loss Account helps us determine the Net Profit by comparing all income sources to all expenses.
Step-by-Step Calculation:
1. Gross Profit: Rs. 1,10,000 (from Trading Account)
2. Add Rent Received: Rs. 33,000
3. Add Interest Income: Rs. 17,000
4. Total Income:
[tex]\[ \text{Gross Profit} + \text{Rent Received} + \text{Interest Income} = 1,10,000 + 33,000 + 17,000 = 1,60,000 \][/tex]
5. Less General Expenses: Rs. 10,000
6. Less Depreciation on Fixed Assets (10% of Rs. 2,50,000):
[tex]\[ 0.10 \times 2,50,000 = 25,000 \][/tex]
[tex]\[ \text{Depreciation} = 25,000 \][/tex]
7. Less Additional Wages Payable: Rs. 10,000
8. Less Expired Prepaid Insurance: Rs. 13,000
9. Less Stationery: Rs. 15,000
10. Total Expenses:
[tex]\[ \text{General Expenses} + \text{Depreciation} + \text{Wages Payable} + \text{Expired Prepaid Insurance} + \text{Stationery} = 10,000 + 25,000 + 10,000 + 13,000 + 15,000 = 73,000 \][/tex]
11. Net Profit:
[tex]\[ \text{Total Income} - \text{Total Expenses} = 1,60,000 - 73,000 = 87,000 \][/tex]
So, the Profit and Loss Account calculations yield:
- Total Income: Rs. 1,60,000
- Total Expenses: Rs. 73,000
- Net Profit: Rs. 87,000
### Summary:
- Trading Account:
- Cost of Goods Sold: Rs. 1,30,000
- Gross Profit: Rs. 1,10,000
- Profit and Loss Account:
- Total Income: Rs. 1,60,000
- Total Expenses: Rs. 73,000
- Net Profit: Rs. 87,000
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