1 / 9

FINAL ACCOUNTS

FINAL ACCOUNTS. Trading Account – shows Gross Profit. Profit and Loss Account – shows Net Profit. Balance Sheet – shows what the business owns and owes and how it has been financed. TRADING ACCOUNT. Gross Profit = Sales – Cost of Sales. 27,500. 1,000. 26,500. 9,000. 15,000. 500.

dawn-sanford
Download Presentation

FINAL ACCOUNTS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FINAL ACCOUNTS • Trading Account – shows Gross Profit • Profit and Loss Account – shows Net Profit • Balance Sheet – shows what the business owns and owes and how it has been financed.

  2. TRADING ACCOUNT Gross Profit = Sales – Cost of Sales 27,500 1,000 26,500 9,000 15,000 500 14,500 23,500 3,750 19,750 6,750

  3. PROFIT AND LOSS ACCOUNT Net Profit = Gross Profit - Expenses 6,750 2,000 8,750 510 125 756 159 845 545 124 400 3,464 5,286

  4. BALANCE SHEET 80,000 13,200 8,700 101,900 80,000 5,286 970 85,286 10,050 3,750 14,866 70,420 16,520 1,750 9,000 30,000 9,000 7,520 109,420 109,420

  5. BALANCE SHEET FIXED ASSETS Premises 80,000 Machinery 13,200 Motor Van 8,700 101,900 CURRENT ASSETS 970 Cash in hand Cash at bank 10,050 Stock 3,750 Debtors 1,750 16,520 CURRRENT LIABILITIES 9,000 Creditors 7,520 Working Capital 109,420 LONG TERM LIABILITIES 80,000 Capital + Net Profit 5,286 85,286 14,866 - Drawings 70,420 9,000 Bank Loan 30,000 Mortgage 109,420

  6. BREAK EVEN ANALYSIS Break even is the point where: • Total costs = total income from sales • No profit has been made • No loss has been incurred • Sales above this point lead to a profit • Sales below this point lead to a loss

  7. BREAK EVEN POINT - can be calculated using a formula TOTAL FIXED COSTS BEP = SELLING PRICE PER UNIT-VARIABLE COST PER UNIT If fixed costs = £8000, selling price per unit =£12, variable cost per unit = £4 Then 1000 units need to be sold to break even 8000 =1000 12 - 4

  8. A break even chart can be used to show break even point Costs & Income Sales BEP Total costs Fixed costs Output/Sales

  9. CASH FLOW • Cash flow is the flow of money into and out of the business. • Poor cash flow means there is not enough cash to meet the day to day business expenses. Cash flow forecasts help firms to anticipate problems

More Related