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Sole Trader Income ST With Adjustments

The document provides an example income statement format with sections for sales, cost of sales, gross profit, other incomes, expenses and profit/loss for the year ended December 31, 2019. It notes that adjustments may be required for prepaid/accrued expenses and incomes according to the rules provided.

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samia asim
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34 views

Sole Trader Income ST With Adjustments

The document provides an example income statement format with sections for sales, cost of sales, gross profit, other incomes, expenses and profit/loss for the year ended December 31, 2019. It notes that adjustments may be required for prepaid/accrued expenses and incomes according to the rules provided.

Uploaded by

samia asim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FORMAT

Income Statement for the year ended 31st December 2019 (Year end as per Question)
$ $
Sales / Revenue X
Less: Sales Returns / Return Inwards (X) X
Less: Cost of Sales
Opening Inventory X
Add: Purchases X
Less: Purchase Returns (X)
Add: Carriage Inwards X
Less: Drawings of goods for personal use (X)
Less: Closing Inventory (X) (X)

Gross Profit X

Add: Other Incomes


Profit on disposal of non-current assets X
Rent / commission / discount received X
Decrease in provision for irrecoverable debts X X
X
Less: Expenses
Rent X
Salaries / Wages X
Discount Allowed X
Carriage Outwards X
Insurance Expenses X
Sundry Expenses X
Utility Expenses / Heat Light and Electricity Expenses X
General Expenses X
Irrecoverable Debts X
Increase in Provision for irrecoverable debts X
Loss on disposal of non-current assets X
Taxes X
Repairs X
Motor Expenses X
Loan Interest Expense X
Depreciation expense - Motor Vehicles/Vans X
Depreciation expense - Fixtures & Fittings X
Depreciation expense - Plant & Machinery etc. X
Debenture Interest X (X)

Profit for the year / Loss for the year X / (X)

NOTE: Adjustments will be required for the prepaid /accrued expenses and incomes in the above
statement as per the requirements of the questions.

Rules for Income Statement Adjustments for prepaid /accrued expenses and incomes,

Accrued Expenses
• Closing accrued expenses balances added to the relevant expense.
• Opening accrued expenses balances subtracted from the relevant expense.

Prepaid Expenses
• Closing prepaid expenses balances subtracted from the relevant expense.
• Opening prepaid expenses balances are added to the relevant expense.
Accrued Income
• Closing accrued income balances are added to the relevant other Income.
• Opening accrued income balances are subtracted from the relevant other Income.

Prepaid Income
• Closing prepaid income balances are subtracted from the relevant other Income.
• Opening prepaid income balances are added to the relevant other Income.

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