SIR SAJID

STATEMENT OF COMPREHENSIVE INCOME (SOCI)

1. Income statement / statement of comprehensive income (SOCI)/ Statement Of Profit or Loss/
trading and profit and loss account (All are names of income statement): Income statement
shows expenses and revenues for year. Income statement is prepared at end of year.

Altd

Statement of comprehensive income

For year ended December 31,2005

Sales 70

Less Cost Of Goods Sold (COGS) 40

Gross Profit 30

Add: Other income 5

35

Less: operating expenses 10

Operating Profit 25

Less: Finance cost 5

Profit Before tax 20

Less: Tax Expense 5

Profit After Tax / Profit For Year / net income 15

Other comprehensive income:

Gain on property revaluation (revaluation reserves) 5

Total comprehensive income for year 20

SIR SAJID
SIR SAJID

CALCULATION OF SALES:

Sales xx 20

Less sales return (x) 5

Net sales xx 15

NOTE: sales 15 will be shown in income statement.

CALCULATION OF COGS:

Opening stock xx

Purchases xx

Total stock available for sale xx

Less closing stock xx

COGS XX

Opening stock + purchases = closing stock + COGS

Sales = COGS + GP

COGS = sales - GP

GP = sales - COGS

CALCULATION OF PURCHASES:

Purchases xx 100

Less purchases return (x) (20)

Add carriage inward xx 10

Purchases xx 90

NOTE: purchases of 90 will be shown in COGS.

NOTE: Carriage inward means transportation expenses paid at time of purchasing goods.

OTHER INCOME:

Examples of other income: rent received from sub letting part of property, discount received from
suppliers.

OPERATING EXPENSE: ( other name of operating expense is administration and distribution expense)

SIR SAJID
SIR SAJID

Examples of operating expenses:

(a) Rent expense

(b) Wages and salary expense

(c) Utility bills

(d) Repairs

(e) Maintenance

FINANCE COST: Interest paid on loan is an example of finance cost.

SIR SAJID
SIR SAJID

STATEMENT OF FINANCIAL POSITION (SOFP)

Balance sheet / statement of financial position. Balance sheet shows financial position of a
business on a certain date. Balance sheet shows assets, liabilities and equity. Balance sheet is
prepared at end of year.

A ltd

Statement Of Financial Position

As at December 31, 2005

Assets:

Non-current assets

Building 20

Plant 30

50

Current Assets:

Receivables 10

Cash 5

15

Total Assets 65

EQUITY AND LIABILITIES:

EQUITY

Capital 20

Profit for year 25

Less: Drawings 5

40

Non-current liabilities:

Loan 15

SIR SAJID
SIR SAJID

Current Liabilities:

Account payable 10

Total Equity and liabilities 65

SIR SAJID
SIR SAJID

ASSIGNMENT

1. Opening inventory 10000

Purchases 50000
Closing inventory 9000
Calculate COGS
2. COGS 45000
Closing inventory 1000
Opening inventory 7000
Calculate Purchases
3. COGS 92000
Closing inventory 8000
Opening inventory 9500
Calculate Purchases
4. COGS 80000
Closing inventory 20000
Purchases 55000
Calculate Opening inventory
5. COGS 72000
Closing inventory 20000
Purchases 55000
Calculate Opening inventory
6. COGS 190000
Purchases 170000
Opening inventory 45000
Calculate closing inventory
7. COGS 200000
Purchases 190000
Opening inventory 25000
Calculate closing inventory
8. Opening inventory 10000
Purchases 150000
Purchase return 15000
Carriage inward 10000
Closing inventory 20000
Calculate COSG
9. Opening inventory 8000
Purchases 140000
Purchase return 10000
Carriage inward 5000
Closing inventory 20000
Calculate COSG

SIR SAJID
SIR SAJID

10. Opening inventory 40000

Purchases 400000
Purchase return 20000
Carriage inward 8000
Carriage outward 5000
Closing inventory 25000
Calculate COSG
11. Opening inventory 5000
Purchases 165000
Purchase return 14000
Sales return 8000
Carriage inward 9000
Closing inventory 7000
Calculate COSG
12. Sales 100000
Purchase return 10000
Sales return 5000
Carriage inward 7000
Opening inventory 9000
Closing inventory 12000
Purchases 45000
Calculate gross profit
13. Sales 95000
Purchase return 8000
Sales return 7000
Carriage inward 5000
Opening inventory 10000
Closing inventory 13000
Purchases 56000
Calculate gross profit
14. Sales 80000
Purchases 50000
Gross profit 10000
Closing inventory 8000
Calculate opening inventory
15. Sales 80000
Purchases 75000
Gross profit 10000
Opening inventory 35000
Calculate Closing inventory
16. Opening inventory 10000
Purchases 60000

SIR SAJID
SIR SAJID

Closing inventory 15000

Gross profit 20000
Calculate sales
17. Sales 10000
Purchase return 1000
Sales return 500
Carriage inward 700
Opening inventory 900
Closing inventory 1200
Purchases 4500
Operating expenses 700
Calculate
(a) COGS
(b) GP
(c) OP(operating profit)
18. Sales 100000
COGS 70000
Operating expenses 10000
Finance cost 4000
Tax 6000
Calculate
(a) COGS
(b) GP
(c) OP
(d) Net income/ Profit for year

LONG QUESTIONS

SIR SAJID
SIR SAJID

QUESTIO-1 : Following are transactions

1. Started business with cash 100000 and bank 50000

2. Purchase building on cash 8000
3. Purchased plan and machinery on cash 10000.
4. Rent expense paid by cash 2000
5. Salary expenses paid by cash 3000
6. Purchased goods on cash 40000
7. Sold goods on cash 90000
8. Purchased goods on credit 15000
9. Sold goods on credit 25000
10. Goods returned by us to supplier 4000 which were purchased on credit

REQUIREMENT:

(a) Prepare General Journal

(b) General ledger
(c) Trial balance
(d) Statement Of Comprehensive Income
(e) Statement Of Financial Position

SIR SAJID