BUSINESS STUDIES 8- 9

TOPIC : FINAL ACCOUNTS

SUB-TOPIC: TRADING ACCOUNT
PRESENTED BY:
NAME : SIMUNTALA JOHN
SCHOOL : MISHISHI DAY SECONDARY
DISTRICT/PROVINCE: CHINSALI / MUCHINGA PROVINCE
COUNTRY : ZAMBIA
CONTACT : +260974298133 / +260968759966
EMAIL : johnsimuntala@gmail.com

CONTACT : +260974298133 / +260968759966 Email: johnsimuntala@gmail.com

 LESSON OUTCOMES

 Prepare the trading account

CONTACT : +260974298133 / +260968759966 Email: johnsimuntala@gmail.com

 PREPARATION OF TRADING ACCOUNT
EXAMPLE 2. SOLUTION
The following balances relate to the books Trading Account for the year ending 31, Dec, 2021
of G. Gibson as at 31 December, 2021 K K K
Sales 27000
  K Less: returns inwards (2000)
Turnover/ net sales 25000
Stock as at 01/01/2021 4,000 Opening stock 4000
Purchases 15000
2,000 Add: purchases 15000
Returns inwards
Returns outwards     1,000 carriage inwards 3000
sales 27,000 18000
Carriage inwards 3,000 Less: returns outwards (1000)
Stock as at 31/12/2021     2,500
Net purchases 17000
Total goods available 21000
Less: closing stock (2500)
You are required to prepare G. Gibson’s Cost of goods sold (18500)
trading Account for the year ending 31 Gross profit 6500
December, 2021                  
 PREPARATION OF TRADING ACCOUNT
EXAMPLE 3 SOLUTION
Trading Account for the year ending 31, March, 2017
The following balances relate to Kabuba
K K K
Traders as at 31 March, 2017
Sales 12000
  K Opening stock 4200
Add: purchases 11000
4,200
Stock as at 01/04/2016 11,000 carriage inwards 3500
Purchases 1,300 14500
Returns outwards     12,000
sales 3,500 Less: returns outwards (1300)
Carriage inwards 1,750 Net purchases 13200
Stock as at 31/03/2017   
Total goods available 17400
Less: closing stock (1750)

You are required to prepare Kabuba Cost of goods sold 15650

Traders’ trading Account for the year ending Gross loss (3650)
31 March, 2017          
 LESSON ACTIVITY
The following information was taken from Chileshe's Trial Balance as at 30th June
2017.

Sales                                 K13,000
Purchases                          K6,000
Closing stock                      K1,500
Opening Stock                    K4,000
Sales returns                      K4,500 
Purchases returns               K2,000

Required: Prepare Chileshe's Trading Account for the year ended 30th June 2017.

CONTACT : +260974298133 / +260968759966 Email: johnsimuntala@gmail.com

 SUMMARY
 Turnover (Net sales)= Sales – Returns inwards

 Total stock available = Opening stock + net purchases

 Net purchases = purchases + direct trading expenses – returns outwards

 Cost of goods sold (sales) = total stock available – closing stock

 Gross proft / loss = turnover (net sales) - cost of goods sold (Cost of Sales).

 Note

 Gross profit is when the Turnover (net sales) exceeds the cost of goods sold (Cost of Sales).

 Gross loss is when the cost of goods sold (Cost of Sales) exceeds Turnover (net sales)

CONTACT : +260974298133 / +260968759966 Email: johnsimuntala@gmail.com

 In the next lesson, we will discuss on the profit and loss account

THANKS YOU

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CONTACT : +260974298133 / +260968759966 Email: johnsimuntala@gmail.com