Question:

Prepare the final accounts of XYZ Ltd. from the following information for the year ended 31st March 2022.

1. Opening stock on 1st April 2021: $50,000
2. Purchases during the year: $250,000
3. Sales during the year: $350,000
4. Closing stock on 31st March 2022: $60,000
5. Salaries and wages: $30,000
6. Rent paid: $10,000
7. Carriage inward: $5,000
8. Carriage outward: $8,000
9. Discount allowed: $4,000
10. Discount received: $3,000
11. Bad debts: $2,000
12. Provision for bad debts: $1,500
13. General expenses: $15,000
14. Interest received: $2,500
15. Depreciation on fixed assets: $7,000
16. Income tax: $5,000

Answer:

Trading Account:
- Opening Stock: $50,000
- Purchases: $250,000
- Carriage Inward: $5,000
- Less: Closing Stock: $60,000

Cost of Goods Sold:
- Opening Stock: $50,000
- Add: Purchases: $250,000
- Add: Carriage Inward: $5,000
- Less: Closing Stock: $60,000

Gross Profit:
- Sales: $350,000
- Less: Cost of Goods Sold

Operating Expenses:
- Salaries and Wages: $30,000
- Rent Paid: $10,000
- Carriage Outward: $8,000
- Discount Allowed: $4,000
- Bad Debts: $2,000
- Provision for Bad Debts: $1,500
- General Expenses: $15,000
- Depreciation on Fixed Assets: $7,000
- Total Operating Expenses

Operating Profit:
- Gross Profit
- Less: Operating Expenses

Profit Before Tax:
- Operating Profit
- Add: Interest Received

Profit After Tax:
- Profit Before Tax
- Less: Income Tax

Net Profit:
- Profit After Tax

Balance Sheet:
- Fixed Assets
- Current Assets
- Less: Current Liabilities

Equity and Liabilities:
- Share Capital
- Reserves and Surplus
- Long-term Loans
- Current Liabilities
- Total Equity and Liabilities

Additional Notes:
- Opening Stock represents the value of inventory at the beginning of the accounting period.
- Purchases refer to the value of goods acquired for resale during the year.
- Sales represent the total revenue generated from selling goods during the year.
- Closing Stock represents the value of inventory at the end of the accounting period.
- Salaries and wages include the expenses incurred for employee compensation.
- Rent paid represents the cost of leasing the business premises.
- Carriage inward refers to the transportation cost of bringing goods into the business.
- Carriage outward represents the transportation cost of delivering goods to customers.
- Discount allowed