Prepare trading and profit and loss account of Bittaye Consultancy for the year ended 31st July, 2016; and Balance sheet as at that date.

Net Sales are calculated by subtracting sales returns from total sales.

$$\begin{align*} \text{Sales} &= \text{D}85,100 \\ \text{Less: Sales Returns} &= \text{D}2,000 \\ \text{Net Sales} &= \text{D}85,100 - \text{D}2,000 = \text{D}83,100 \end{align*}$$

COGS is calculated by taking opening stock, adding net purchases and carriage inwards, and then subtracting closing stock. Net purchases are purchases less purchases returns.

$$\begin{align*} \text{Opening Stock} &= \text{D}15,400 \\ \text{Purchases} &= \text{D}64,380 \\ \text{Less: Purchases Returns} &= \text{D}2,350 \\ \text{Net Purchases} &= \text{D}64,380 - \text{D}2,350 = \text{D}62,030 \\ \text{Carriage Inwards} &= \text{D}970 \\ \text{Cost of Goods Available for Sale} &= \text{D}15,400 + \text{D}62,030 + \text{D}970 = \text{D}78,400 \\ \text{Less: Closing Stock} &= \text{D}18,750 \\ \text{Cost of Goods Sold (COGS)} &= \text{D}78,400 - \text{D}18,750 = \text{D}59,650 \end{align*}$$

Gross Profit is the difference between Net Sales and Cost of Goods Sold.

$$\begin{align*} \text{Gross Profit} &= \text{Net Sales} - \text{COGS} \\ &= \text{D}83,100 - \text{D}59,650 = \text{D}23,450 \end{align*}$$

These are all other expenses incurred during the period.

$$\begin{align*} \text{Wages and salaries} &= \text{D}12,300 \\ \text{Rent and rates} &= \text{D}7,250 \\ \text{Insurance} &= \text{D}1,140 \\ \text{Carriage outwards} &= \text{D}2,050 \\ \text{Electricity cost} &= \text{D}560 \\ \text{Sundry expenses} &= \text{D}500 \\ \text{Total Operating Expenses} &= \text{D}12,300 + \text{D}7,250 + \text{D}1,140 + \text{D}2,050 + \text{D}560 + \text{D}500 = \text{D}23,800 \end{align*}$$

Net Profit/Loss is Gross Profit less Total Operating Expenses.

$$\begin{align*} \text{Net Profit/Loss} &= \text{Gross Profit} - \text{Total Operating Expenses} \\ &= \text{D}23,450 - \text{D}23,800 = \text{D}(350) \quad (\text{Net Loss}) \end{align*}$$

Total Assets are the sum of Non-Current Assets and Current Assets.

$$\begin{align*} \textbf{Non-Current Assets:} & \\ \text{Buildings at cost} &= \text{D}46,000 \\ \text{Fixtures at cost} &= \text{D}25,000 \\ \text{Motor vehicles at cost} &= \text{D}20,500 \\ \text{Total Non-Current Assets} &= \text{D}46,000 + \text{D}25,000 + \text{D}20,500 = \text{D}91,500 \\ \\ \textbf{Current Assets:} & \\ \text{Debtors} &= \text{D}13,700 \\ \text{Cash at bank} &= \text{D}4,500 \\ \text{Cash in hand} &= \text{D}650 \\ \text{Closing Stock} &= \text{D}18,750 \\ \text{Total Current Assets} &= \text{D}13,700 + \text{D}4,500 + \text{D}650 + \text{D}18,750 = \text{D}37,600 \\ \\ \textbf{TOTAL ASSETS} &= \text{D}91,500 + \text{D}37,600 = \text{D}129,100 \end{align*}$$

This includes the adjusted Capital, Non-Current Liabilities, and Current Liabilities.

$$\begin{align*} \textbf{Capital:} & \\ \text{Opening Capital} &= \text{D}107,000 \\ \text{Less: Drawings} &= \text{D}7,200 \\ \text{Less: Net Loss} &= \text{D}350 \\ \text{Closing Capital} &= \text{D}107,000 - \text{D}7,200 - \text{D}350 = \text{D}99,450 \\ \\ \textbf{Non-Current Liabilities:} & \\ \text{Loan- Access Bank} &= \text{D}15,000 \\ \\ \textbf{Current Liabilities:} & \\ \text{Creditors} &= \text{D}14,650 \\ \\ \textbf{TOTAL CAPITAL AND LIABILITIES} &= \text{D}99,450 + \text{D}15,000 + \text{D}14,650 = \text{D}129,100 \end{align*}$$