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|
Sales
|
|
275,000 |
|
Less:
Cost of Sales |
|
(175,000) |
|
Opening Inventory |
12,000 |
|
|
Add: Purchases |
178,750 |
|
|
Less: Closing |
(15,750) |
|
|
Gross Profit |
|
100,000 |
|
|
|
|
|
Less:
Admin Cost= Cost – Prepaid Admin Cost |
24,750-
1,000 |
(23,750) |
|
Less:
Distribution Cost= Cost- Accrued Dist.
Cost |
26,250+2,000 |
(28,250) |
|
Less:
Depreciation on Equipment |
|
(23,750) |
|
Less:
Depreciation on Furniture |
|
(37,500) |
|
Add:
Other Income (Dividend) |
|
7,000 |
|
|
|
|
|
Profit before Interest and Tax |
|
(6,250) |
|
Less:
Interest on Debentures |
62,500*
10% = 6,250 |
(6,250) |
|
Less:
Tax for the year |
|
(19,000) |
|
Profit after Tax and Interest or Net
Profit |
|
(31,500) |
|
Less:
Dividend paid |
|
(21,750) |
|
Profit after interest, Tax and Dividend |
|
(53,250) |
Financial statement
for Sole Proprietorship Business
|
Assets |
|
|
|
Non-Current
Assets |
|
|
|
Equipment |
105,000
– 23,750 |
81,250 |
|
Furniture
|
250,000
– 37,500 |
212,500 |
|
Investment |
|
82,500 |
|
|
|
376,250 |
|
Current Assets |
|
|
|
Inventories |
|
15,750 |
|
Receivables |
|
21,250 |
|
Cash |
|
20,250 |
|
Prepaid
Admin Expense |
|
1,000 |
|
|
|
58,250 |
|
Total Assets |
|
434,500 |
|
|
|
|
|
Liabilities and
Capital |
|
|
|
Capital |
|
|
|
Shares
|
|
200,000 |
|
Share
Premium |
|
75,000 |
|
Retained
Earnings |
48,750 |
|
|
Less: Loss |
(53,250) |
(4,500) |
|
|
|
270,500 |
|
Non- Current
Liabilities |
|
|
|
Debentures
(10%) |
|
62,500 |
|
|
|
62,500 |
|
Current
Liabilities |
|
|
|
Payables |
|
15,500 |
|
Accrued
Rent |
|
61,250 |
|
Accrued
Distribution Cost |
|
2,000 |
|
Accrued
Tax |
|
19,000 |
|
Accrued
Interest on Debenture |
|
3,750 |
|
|
|
40,250 |
|
Total
Liabilities |
|
102,750 |
|
Total Capital
and Liabilities |
|
434,550 |
A/Cs
for Partnership Business
Profit and Loss A/C
|
Sales |
80,000 |
|
|
Less: Discount Allowed |
(200) |
|
|
Net
Sales |
|
79,800 |
|
|
|
|
|
Less: Cost of Sales |
|
(57,600) |
|
Opening |
10,000 |
|
|
Add: Purchases –
Discount Received |
60,000
– 400 = 59,600 |
|
|
Less: Closing |
(12,000) |
|
|
|
|
|
|
Gross Profit |
|
22,200 |
|
|
|
|
|
Less: Rent, Rates and
Insurance |
Rent,
rates and insurance – prepaid= 4,000 – 100 = 3,900 |
(3,900) |
|
Less: Vehicle
Depreciation |
2,000
* 20%= 400 |
(400) |
|
Less: General
Expenses |
|
(4,000) |
|
Less: Wages |
Wages
+ accrued Wages= 5,200 + 40 |
(5,240) |
|
|
|
|
|
Less: Fittings Depreciation |
1,000
* 10%= 100 |
(100) |
|
Net Profit |
|
8,560 |
Dr. Profit
and Loss Appropriation A/C Cr.
|
Partner’s
Salaries |
|
Net
Profit |
8,560 |
|
Ahmad |
2,000 |
|
|
|
Mohammad |
1,600 |
|
|
|
Interest
on Capital |
|
|
|
|
Ahmad (16,000 * 10%) |
1,600 |
|
|
|
Mohammad (8,000 * 10%) |
800 |
|
|
|
Appropriation
of Profit : |
|
|
|
|
Ahmad (2,560 / 2) |
1,280 |
|
|
|
Mohammad (2,560/2) |
1,280 |
|
|
Capital
A/C
Dr Cr
|
|
Ahmad |
Mohammad |
|
Ahmad |
Mohammad |
|
|
|
|
Bal. b/d |
16,000 |
8,000 |
|
Bal. c/d |
16,000 |
8,000 |
|
|
|
|
|
16,000 |
8,000 |
|
16,000 |
8,000 |
Partner’s Current A/C
|
|
Ahmad |
Mohammad |
|
Ahmad |
Mohammad |
|
Drawings
|
2,000 |
2,000 |
Bal. b/d |
6,000 |
4,000 |
|
|
|
|
Partner’s
Salary |
2,000 |
1,600 |
|
|
|
|
Interest
on Capital |
1,600 |
800 |
|
Bal. c/d |
7,280 |
7,280 |
Profit
|
1,280 |
1,280 |
|
|
|
|
|
|
|
|
|
10,880 |
10,880 |
|
10,880 |
10,880 |
Financial Statement of Partnership
Association
|
Assets |
|
|
|
Current Assets |
|
|
|
Vehicles
|
(2,000
– 400) |
1,600 |
|
Land
|
|
20,000 |
|
Fittings
|
1,000
- 100 |
900 |
|
|
|
22,500 |
|
Non – Current
Assets |
|
|
|
Stock
|
|
12,000 |
|
Receivables
|
|
8,000 |
|
Cash
|
|
1,000 |
|
Rent
Prepaid |
|
100 |
|
|
|
21,100 |
|
Total Assets |
|
43,600 |
|
|
|
|
|
Capital and
Liabilities |
|
|
|
Capital : Ahmad |
|
16,000 |
|
Mohammad |
|
8,000 |
|
Share
Premium |
|
6,500 |
|
Profits
|
|
8,560 |
|
Liabilities |
|
|
|
Payables
|
|
4,000 |
|
Provisions
|
|
500 |
|
Wages
Accrued |
|
40 |
|
|
|
|
|
Total Capital
and Liabilities |
|
43,600 |
Comparison
of sole proprietorship and partnership:
Sole proprietorship and
partnership business are same, but they have some differences in the structure
of accounts and functions, like in the final accounts of partnership business,
the profit or loss is transferred to another account called, profit or loss appropriation
account. Then in the account called the appropriation account of partners, the
profit is further apportioned into, interest on capital, interest on drawings,
salary or other remuneration due to remuneration. In the end the balance from
the appropriation account is transferred to the capital account in the ratio in
which profit is shared among partners. In a sole proprietorship business the
balance of the capital account is shown in the balance sheet only, however, the
balance sheet of the partnership concern shows the balance in the individual
capital account as well.
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