# Principles of Accounting: William Sachikonye Income Statement

////Principles of Accounting: William Sachikonye Income Statement

## Principles of Accounting: William Sachikonye Income Statement

### ZIMSEC O Level Principles of Accounting: Single entry and Incomplete records: Example 2

• This is a solution including workings for the question posted here
• We are attempting to create an Income Statement so naturally we will start by calculating the sales figure for the year

#### Sales calculation for the year ended 31 March 20×6

 Jane Sango Sales Calculation Details Amount(\$) Details Amount(\$) Balance b/d 2 643 Bank 44 846 Sales for the period (A) 50 136 Cash Sales 3 921 Balance c/d 4 012 52 779 52 779

NB This is not a real account hence the inclusion of cash sales in our entries. We could simply omit cash sales in the table and add it later on

#### Purchases Calculation

 Purchases Calculation Details Amount(\$) Details Amount(\$) Payments of trade creditors(B) 22 177 Balance b/d 1 598 Balance c/d 2 445 Purchases 23 024 24 622 24 622

#### William Sachikonye Income Statement of the year ended 31 March 20×6

 \$ \$ Sales (A) 50 136 Less Cost of Sales Opening Stock 3 210 Add Purchases(B) 23 024 26 234 Less Closing Stock (4 063) (22 171) Gross Profit 27 965 Less Expenses Electricity 1 090 Telephone 360 Rent 2 000 Advertising 1 430 Insurance (946-177) 769 Motor Vehicle Expenses(2 116+291-432) 1 975 Depriciation 1 640 (9 264) Net Profit 18 701

#### Depriciation Calculations

For Motor vehicles:

20% of 5 100 = 1 020

For Shop Fittings

 \$ Value at the beginning 4 200 Additions during the year 2 550 Disposal (250) Drawings (300) 6 200 10% Depreciation 620

Total Depreciation for the year 620+1 020

= \$1 640

We will not calculate disposal on items that were disposed nor on items that were taken for taken for personal use. Incidentally since the fittings were sold at cost profit on disposal is \$0 so it is not included in the Income Statement at all.

The Statement of Financial Position for this question can be found here

To access more topics go to the Principles of Accounting Notes.

By |2018-01-31T12:22:31+00:00January 31st, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|Comments Off on Principles of Accounting: William Sachikonye Income Statement

### About the Author: Garikai Dzoma

He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today's world.