Preparation of Departmental Trading, Profit And Loss Account And Balance Sheet - SS3 Accounting Lesson Note
Question:
The following transactions were entered into the trial balance of the media department of Sade Enterprise for the year ending December 2021. You are required to prepare the departmental trading profit and loss account and the departmental balance sheet in tabular form
TRIAL BALANCE OF THE MEDIA DEPARTMENT OF SADE ENTERPRISE FOR THE YEAR ENDED DECEMBER 2021:
|
Account |
Debit (₦) |
Credit (₦) |
|
Cash |
20,000 |
- |
|
Accounts Receivable |
50,000 |
- |
|
Equipment |
150,000 |
- |
|
Accumulated Depreciation - Equipment |
10,000 |
- |
|
Supplies |
5,000 |
- |
|
Prepaid Rent |
20,000 |
- |
|
Advertising Revenue |
- |
180,000 |
|
Salaries Expense |
40,000 |
- |
|
Rent Expense |
10,000 |
- |
|
Depreciation Expense |
10,000 |
- |
|
Supplies Expense |
3,000 |
- |
|
Interest Expense |
2,000 |
- |
|
Total |
296,000 |
180,000 |
Answer:
Media department trading profit and loss account
For the year ended December 2021
|
Particulars |
Amount (₦) |
|
Sales (Advertising Revenue) Cost of Goods Sold: - Salaries Expense - Rent Expense - Depreciation Expense - Supplies Expense Gross Profit Other Expenses: - Interest Expense Net Profit |
180,000 40,000 10,000 10,000 3,000 117,000 2,000 115,000 |
Departmental balance sheet
For the year ended December 2021
|
Particulars |
Amount (₦) |
|
Cash Accounts Receivable Equipment Accumulated Depreciation - Equipment Supplies Prepaid Rent Total Assets Total Liabilities Owner's Equity: - Capital Total Liabilities and Owner's Equity |
20,000 50,000 150,000 (10,000) 5,000 20,000 235,000 - - 235,000 235,000 |
Note: The departmental balance sheet shows the assets, liabilities and owner's equity of the media department as of the end of the year. Since this is a departmental account, the liabilities and owner's equity are not separated.