Income Statement And Balance Sheet: Carriages Inwards and Outwards (Essay Sample)

INCOME STATEMENT AND BALANCE SHEET
Name:
Institutional Affiliation:
An Income Statement is one of a company’s crucial financial statement that help shows their profit and losses over a certain period. The profit or loss is attained by taking all revenues and subtracting all expenses from both operating and non-operating activities.
An income statement is a statement used in both corporate finance and accounting. The statement displays the company’s revenue, costs, gross profit, selling and administrative expenses, other expenses and income, taxes paid, and net profit, in a coherent and logical manner.
Carriages Inwards and Outwards
The cost to deliver goods from the firm to the customer is known as Carriage Outwards (Sales Carriages). The cost to transport goods (stock) into a firm is called Carriage Inwards (Purchases Carriages).
If a supplier charges you for the delivery of the goods on top of the cost of the purchases, then accountants add this to the value of sales. Therefore the cost of carrying inwards is usually recorded in Trading Accounts.
If one pays to deliver the goods to a customer, then this cost will be charged as an expense on the income statement of the firm. In similar cases, they are made as debit entries because they reduce the number of sales located on the sidecredit of the trading and profit & loss account.
Marketing, Advertising, and Promotion Expenses
Majority of businesses have many expenses some of which are related to selling goods and/or services. In this scenario marketing, advertising, and promotion expenses we will group them together as they are similar expenses, all related to selling.
General and administrative expenses
These Expenses include the selling, general, and the administrative section that contains all other indirect costs associated with running the business. This includes salaries and wages, rent and office expenses, insurance, travel expenses, and sometimes depreciation and amortization, along with other operational expenses.
Profit and Loss Acc for the year ended 2015/2016



Sales

765,000


Commissions received

-3048014795400
8,000

773,000




Less: Cost of Goods Sold



Opening Stock

63,000


Add Purchases or Inventory

545,000


Add Carriage Inwards

-30480163830001,000


Less Closing Stock

-3048013081000(0)

-4000514033500(609,000)

Gross Profit


164,000




Less Expenses



Wages and salaries

43,000


General expenses

8,000


Marketing costs
Maintenances

5,000
2,000


Carriage Outwards

5,000

(63,000)

Net Profit


7620247649007620190499007620-100101,000







Calculating of Gross Profit- Gross profit is calculated by subtracting Cost of Goods Sold (or Cost of Sales) from Sales Revenue.
Balance sheet (it i...