CJL Car Care Centre

Trading and Profit and Loss account for the period ended 31 May 2009

$ $ $
Sales 226 000
Less: Sales Returns / Returns Inward (1 650)
Net Sales / Turnover (Selling Price) 224 350
Less: COST OF GOODS SOLD/ COST OF SALES
Opening Stock 26 000
Add: Purchases 200 000
Add: Carriage Inwards (transportation exp) 0
Gross Purchases 200 000
Less: Purchases Returns / Returns Outward (1 598)
Net Purchases 198 402
Cost of Goods Available for Sale (COGAS) 224 402
Less: Closing Stock (56 800)
COST OF SALES/COST OF GOODS SOLD (COGS) (Cost Price) (167 602)
GROSS PROFIT 56 748
Add: Revenues / Income
Discount Received 2 100
 Commission Received 4 200 6 300
Adjusted Gross Profit
63 048
Less: Expenses
Discount Allowed 1 600
Payroll 6 300
Electricity 5 000
Cleaning & Maintenance 1 100
Telephone 6 500
General Expenses 8 700
Total Expenses (29 200)
NET PROFIT 33 848

Important notes to write and learn:

This is the vertical TPL format.
Another name for the TPL is the Income Statement.
The Trading a/c starts at Sales and ends at Gross Profit. The trading a/c shows profit from trading (buying and selling).
The Profit and Loss a/c starts at Gross Profit and ends at Net Profit. The P & L a/c shows take home profit (after additional income and
expenses).
Gross Profit = Net Sales – COGS
COGS = Opening Stock + Purchases + Carriage Inwards – Returns Outwards – Closing Stock
Net Profit = Gross Profit + Revenues - Expenses