BANGLADESH INTERNATIONAL SCHOOL, DAMMAM

Chapter - 8 Financial Statements – Part A

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Q1. (a) Explain the difference between gross profit and net profit.

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(b) State how the cost of sales is calculated.

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Q2 complete the following table to show the double entry for transferring the following items to the
income statement for the year ended 28 February 20-2.

debit Credit
Total purchases

Total sales returns

Total general expenses

Total rent received

Inventory on 1 March 20-1

Q3. Mustafa is a financial advisor. He provided the following information for the year ended 30 June
20-4.

$
Commission received 84000
Interest received 2300
Rent and rates 12000
General office expenses 8050
Salary assistant 25000
Postages and telephone expenses 4950

Prepare Mustafa’s income statement for the year ended 30 June 20-4.

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Q4. Halima is a trader. She provided the following information for the year ended 31 august 20-3

$
Revenue (sales) 80000
Purchases 35000
Sales returns 2000
Carriage inwards 7500
Carriage outwards 5000
Inventory 1 September 20-2 10000
Inventory 31 august 20-3 16000
Discount allowed 450
Discount received 230
General expenses 18000
wages 24000

Prepare Halima’s income statement for the year ended 31 August 20-3
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