SOLE TRADER

Income Statement

Trading, Profit and Loss Account are now named Income Statement.
The purpose of preparing Income Statement is to calculate Net Profit / Loss of
the business after one year accounting period

Scheme
Trading Account
*) Sales - CoS = Gross Profit / Loss
CoS = Op. Inv + Purchases - Clos. Inv Income Statement
Purchaess (Net) = Purchases - Pur. Return + Car.Inwards - Drawings (Goods) (resulting Gross and Net Profit / Loss)

Profit and Loss Account

**) Gross Profit / Loss - Expenses = Net Profit / Loss

HOW TO MAKE AN INCOME STATEMENT (For Sole Trader)

Company's name
Income Statement for the year ended ........
$ $ $
Sales xxx
Sales return / Return Inwards (xxx) +
Net Sales xxx

Cost of Sales (CoS):

Opening Inventory xxx
Purchases xxx
Purchases return / Return Outwards (xxx)
Carriage inwards / duty on purchases xxx +
COGAS xxx
(-) Closing Inventory xxx
Goods for own use / Drawings on goods xxx +
(xxx) +
Cost of Sales (xxx) +
GROSS PROFIT xxx

Other Revenue:
Discount received xxx
Commission revenue xxx
Rent received xxx
Interest received xxx
Bad debt recovered xxx
Decrease in Provision for doubtful debts xxx
Any other revenues xxx +
xxx +
Total revenue xxx

Operating Expenses:
Rent payable / expenses xxx
Wages and salaries xxx
Discount Allowed xxx
Carriage outwards xxx
Bad debts xxx
Interest on loan xxx
Depreciation xxx
Increase in provision for doubtful debts xxx
Any other expenses xxx +
Total operational expenses (xxx) +
NET PROFIT xxx
 SOLE TRADER

Statement of Financial Position

A Statement of Financial Position is a list of the assets and liabilities of a business at a particular date.

HOW TO PREPARE STATEMENT OF FINANCIAL POSITION (For Sole Trader)

Statement of Financial Position consist of: - Non-Current Assets
- Current Assets
- Current Liabilities
- Non-Current Liabilities
- Financed by / Capital

Company's name
Statement of Financial Position as at .........................
$ $ $
Cost Prov NBV
Non-Current Assets:
Premises xxx xxx xxx
Motor Vehicles xxx xxx xxx
Any other NCA xxx + xxx + xxx +
Total NCA xxx xxx xxx

Current Assets
Inventory xxx
Trade Debtors / Trade Receivables xxx
Provision for doubtful debts (xxx) +
Net Trade Receivables xxx
Cash in hand xxx
Cash at bank (Bank) xxx
Other receivables (Prepaid Expense & Accrued Revenue) xxx +
Total Current Assets xxx +
TOTAL ASSETS XXX

Capital
Opening Capital (Beginning Balance) xxx
Additional Capital (if any) xxx
Net Profit / Loss xxx / (xxx)
Drawings (xxx) +
Closing Capital (Ending Balance) xxx

Non-Current Liabilities = MUST BE EQUAL

Bank Loan xxx +
Total Non-Current Liabilities xxx

Current Liabilities
Trade Creditors / Trade Payables xxx
Bank overdraft xxx
Other payables (Accrued Expense & Prepaid Revenue) xxx +
Total Current Liabilities xxx +
TOTAL CAPITAL & LIABILITIES XXX