COMPONENT OF FINANCIAL STATEMENT
Question 1 :
Financial Statement includes __________.
TREATMENT OF CAPITAL EXPENDITURE
Question 2 :
Amount paid for the acquisition of Building would be ————?
Explanation:
Since amount is paid for the acquisition of Building ,which is a capital assets, such amount would be added (Debited) to the Cost of Building .
DETERMINING-GROSS PROFIT
Question 3 :
From the following information you are required to ascertain gross profit.
Purchases 1050000
Return Inwards 20000
Sales 1260000
Return Outwards 10000
Direct Expenses 3000
Rent 10000
Explanation:
Gross Profit = Sales (-) Purchases (-) Direct Expenses
1240000 (-) 1040000 (-) 3000
197000
Working note 1: Net Purchases= Purchases (-) Return Outwards
Net Purchases= 1050000 (-) 10000
Net Purchases= 1040000
Working note 2: Net Sales= Sales (-) Return Inwards
Net Sales= 1260000 (-) 20000
Net Sales= 1240000
Note: Since Rent is an indirect expenes therefore it would be transferred to Profit and Loss account instead of Trading account.
1 thought on “Financial Statement Of Sole Proprietorship | Accounts Class 11”
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