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Homework answers / question archive / Saiqa Qureshi Industries, had the following transactions during the month of January 2020
Saiqa Qureshi Industries, had the following transactions during the month of January 2020. Prepare a profit and loss statement based on the following data, being careful to include only those items that should appear in the financial statement. 1. Cash received from the bank loan was Rs.10,000 2. Revenues earned and received in cash were Rs. 8,500 3. The owner, Saiqa Qureshi, withdrew Rs. 4,000 in cash. 4. Expenses incurred and paid were Rs. 5,000. 5. Revenue unearned for the month amounted to Rs. 3,000.
Revenue earned and received 8500
(Gross income)
Expenses incurred and paid (5000)
Net profit 3500
Note :-
1. Bank loan received is not the part of the company's revenue. So it will not be reported in income statement or profit and loss statement.
2.Earned revenue is treated as gross income in profit and loss statement.
3. drawings account is not an expense account so it is not included in income statement . In balance sheet drawing are substracted from capital at the end of accounting period.
4. Expenses incurred or paid are included in the operating section of income statement.
5. Revenue unearned is money received from the company or individual in advance. For which services are yet to be paid So it is recorded as a current liability.
But when the services will be provided, the unearned revenue becomes revenue on the income statement.
