How to prepare a trading, profit & loss account

Question

can any one help me this as im completely confused. I need 2 prepare a trading, profit and loss account for the year ended 31st December 2007.

the trial balance for the business is:

£ £

sales 244,275

capital 196,375

creditors 3,550

opening stock 1,450

rates 3,050

Motor expenses 4,025

purchses 67,000

insurance 2, 825

fixtures & fitting 32,500

motor vehicles 15,000

office equipment 14,000

debtors 15,000

bank 4,750

wages & salaries 75,000

premises 186,200

repairs & renewals 850

advertising 4,900

drawings 17,650

444,200 444,200

closing stock of food & beverages at 31st december 2007 was £2,975

Answer 1

SALES - COST OF SALES = GROSS PROFIT

then

GROSS PROFIT - EXPENSES = NET PROFIT

That is what the Trading, P&L a/c is for. To givr u the Net profit of a business.

Sales - Cost of sales (o/stock + purchases - closing stock)

= Gross profit

Comes to 178800.

Now subtract all the  expenses:

Motor exp

Rates

Insurance

Wages + salaries

Repairs + renewals

Advertising

= the net profit. Comes to 88150 to my calculations.

The rest of the stuff Bank, F&F, Motor vehicle, office equip, drawings will go to the balance sheet.

Funny thing is this business has not accounted for depreciation on its equipments.

Cheers.