Example of a Trading Company Financial Report

Are you looking for examples of trading company financial statements? If this is what you are doing now, then you must read this article to the end. Because here sinaumedia will explain the meaning of a trading company, types of financial statements, income statements, examples of cash flow statements, types of cash flow reports, and examples of trading company reports.

So in making a report we should not be careless, because there are procedures for writing it. In addition to the procedures, there are also several methods for preparing trading company financial reports that we must pay close attention to.

Because the financial statements of trading companies are vital in nature because they determine whether the company is producing for a certain period of time or is it making a loss.
So for those of you who want to know complete information about trading companies along with examples of their financial statements, please read the following article.

 

1. Definition of a trading company

Have you often heard the term trading company, but until now you didn’t know what it meant officially? Trading company is a company engaged in the trading of goods or the main activity in the company is the sale of goods.

Generally trading companies will sell the products they sell without any changes to the products being sold. What is meant by changing the product is changing the item either in form or value of the item itself. So the point is that a trading company only buys goods or products and immediately resells them at a higher price. The trading companies benefit from this price difference.

There are several types of trading companies that exist today based on consumer segmentation and the types of goods sold. Like :

  • Raw Goods or Production Trading Companies
  • Finished Goods Trading Company
  • Wholesaler Trading Company
  • Middleman or Intermediary trading company
  • Retail trading company or Retailer

1.1 Trading Company Accounts in Financial Statements

In trading companies, especially in financial reports, they usually have several accounts that are different from non-trading companies, so recording these accounts will be useful to find out whether sales are growing or not. This account consists of:

1. Purchasing Account

This purchase account is used to record every transaction on the purchase of goods made in cash or on credit.

2. Purchase discount account

The purchase discount account has the function of providing a discount record at the beginning of the transaction by the seller of goods and the amount of this purchase discount is determined by the seller.

3. Purchase return account

This account has a function to record the return of merchandise that was purchased and damaged so it must be returned.

4. Purchasing expense accounts

This next account has the function of recording the amount of account expenses which are the responsibility of the trading company.

5. Account of selling expenses

There is also a sales freight expense account that is used to record payment costs for goods that have been sold.

6. Sales Account

This sales account has a function to record every sales transaction of goods with credit or cash payments. Sinaumed’s can also learn how to record sales transactions through the Computerized Trading Company book with MYOB.

7. Sales discount account

This account is used to record discounts that will be given from the seller to the buyer.

8. Merchandise Inventory Account

This account is used to record the value of inventory in a certain period.

 

2. Types of trading company financial statements

 

There are several types of financial reports for trading companies that you should know when you want to enter the world of trading companies, such as:

  • Income statement
  • Cash flow statement
  • Inventory Report
  • Balance Report
  • Debt Report
  • Receivable Report

With the many types of reports that must be made, it is very important for companies to provide financial reports quickly, precisely and accurately. Therefore, there is the development of an accounting computer program which can also be studied through the Direct Practice: MYOB version 15 book on Trading Companies.

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And here sinaumedia Literasi will explain several types of trading company financial reports in more detail and detail. So that you can use it as a reference when you want to get into the trading company business.

2.1 Profit and Loss Report

The first is the income statement, this is a report that provides information about the performance of a trading company in a certain period. By making this income statement, each company can in detail and in detail calculate the losses and profits earned in a predetermined period.

So that the company can analyze more clearly about the burden that must be borne due to losses and also the total income. Learn how to make profit and loss reports, and various other financial reports through the book Introduction to Accounting 2 Trading Companies below.

2.2 Example of a trading company profit or loss

PT ABC JAYA ABADI
PROFIT AND LOSS REPORT
DECEMBER 31, 2021

I. NET SALES

  • Sales IDR 60,000,000 –
  • Sales Returns and IDR 3,500,000 discount
  • Net Sales IDR 56,500,000

II. COST OF GOODS SOLD

  • Finished Goods Inventory (Initial) IDR 30,000,000 +
  • Cost of Production IDR 10,000,000
  • Goods Available For Sale IDR 40,000,000 –
  • Finished goods inventory (ending) IDR 15,000,000 –
  • Cost of Goods Sold IDR 25,000,000
  • Gross Profit IDR 35,000,000

III. OPERATIONAL COST COST

a) SELLING COSTS :

  • Sales Department Salary Cost IDR 2,000,000 +
  • Commission Fee IDR 1,000,000 +
  • Advertising Fee IDR 1,000,000 +
  • Transportation fee IDR 1,500,000 +
  • Miscellaneous bills for sales of IDR 500,000 =
  • Total Selling Cost IDR 6,000,000

b) ADMINISTRATIVE AND GENERAL FEES:

  • Office Supplies Cost IDR 750,000 +
  • Adm and general insurance costs IDR 1,000,000 +
  • Electricity and telephone costs for the General section IDR 300,000 +
  • Cost of Depreciation of Buildings Bag. General IDR 500,000 +
  • Office Equipment Depreciation Cost IDR 100,000 +
  • Cost of Miscellaneous general parts IDR 300,000+
  • Total ADM and General Fee IDR 750,000 +
  • TOTAL OPERATIONAL COSTS IDR 3,700,000 –
  • NET OPERATING PROFIT IDR 25,300,000

Information :

There are 2 important things in the profit and loss example above, namely costs or expenses and also sales.

For a more detailed explanation of the income statement above is as follows:

Ready-to-Sell Goods Inventory

To calculate the inventory of ready-to-sell goods, the following formula is needed:

Beginning Inventory + Net purchases (Consisting of gifts – purchase discounts – purchase returns)

An example of the calculation:
= IDR 150 million + IDR 170 million = IDR 320,000,000

Cost of goods sold

To calculate the cost of goods sold, you can use the formula:

Ready-to-sell Goods Inventory – Ending Inventory

an example is as follows:
= IDR 320 million – IDR 200 million = IDR 120 million

Gross profit

And to determine the calculation of gross profit is the following formula:

Total Sales – Cost of Goods Sold

an example is as follows:
= IDR 200 million – IDR 120 million = IDR 80 million

Operational Profit and Loss

To be able to calculate operational profit and loss, you can use the following formula:

Gross Profit – Operating expenses

Example of the calculation:

IDR 80 million – IDR 30 million = IDR 50 million

Operating Profit and Loss

Finally, to calculate the total profit and loss of a business, use the formula:

Operational Profit and Loss + Other Income-Other Expenses

Example of the calculation:

IDR 50 million – IDR 15 million = IDR 35 million

 

2.3 Things that must be considered in making a profit and loss report

There are several things that must be considered in preparing an income statement such as:

  • Determine the format and form of the income statement to be used
  • Create concepts and understanding of each element that is made in a predetermined profit and loss report format
  • Understand how to analyze existing transactions on the income statement

So when making financial reports about profit and loss you have to really understand and master what we explained above.

 

2.4 Example of a trading company balance sheet

The company’s financial statement balance sheet is a report prepared to display detailed information about the company’s capital, debt and assets at the end of a certain period. In the company is usually also known as the statement of financial position.

The explanation of the balance sheet report above is as follows:

  • Total assets = IDR 261,560
  • Total debt Rp. 50,360
  • Total capital Rp. 211,200
  • So that the balance at a value of Rp. 261,560

3. Example of a cash flow statement for a trading company

The statement of cash flows or in English is known as the Statement of Flow is a summary of cash outlay and receipts from a trading company within a certain time and period.

Generally, this cash flow is divided into 3, namely:

  1. Investment Activity
  2. Operations Activity
  3. Funding Activity.

3.1 operating activities

For operating activities, it is generally related to the profit and loss statement of cost of goods sold, operating expenses and sales transactions.

3.2 investment activity

Investment activities are generally related to sales and purchase transactions of fixed assets.

3.3 financing and funding activities

Funding activation generally relates to company capital and company obligations such as selling securities, increasing capital and paying debts.

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4. Types of cash flow statements

In making cash flow statements there are also several methods of making the first is the cash flow statement direct method or the Direct Method and the cash flow statement the indirect method or also known as the Indirect Method.
For more details about the types of cash flow statements, you should read the following article along with examples of cash flow statements.

4.1 Statement of cash flows direct method

The following is an illustration of making a direct method cash flow statement that you can use as a reference:

Example of a Direct Method Cash Flow Statement

PT. ABC 123
STATEMENT OF CASH FLOWS
FOR 31 DECEMBER 2021

Cash flow from operations :
Added :
Cash received from customers IDR 30,000,000
Less :
Cash to pay operating costs IDR 3,700,000
Cash to buy inventory IDR 5,000,000, –
Cash to pay taxes IDR 2,500,000 – Cash to pay interest costs IDR 1,000,000 =
IDR
12,200,000 –
Net cash flow from operating activities
IDR
17,800,000 ,000.-
Less:
Cash out to purchase equipment Rp. 5,500,000.-
Net cash flow for investment activities Rp. 20,000,000.-
Financing cash flow:
Plus:

Cash received from the sale of shares Rp 15,000,000
Less:
Cash for paying dividends Rp 3,000,000
Cash for paying bonds payable Rp 5,000,000 = Rp 8,000,000
Net cash inflow from financing activities Rp 2,500,000,-
Increase in cash Rp 4,500,000,-
Cash balance at the beginning of the year Rp 60,000,000,-
Cash balance at the end of the year Rp 84,500,000,-

4.2 Statement of Cash Flows Indirect Method (Indirect Method)

The definition of the indirect method is the method used to make cash reports in which the amount of cash flow compared to the company’s operating activities is calculated based on the income statement and then adjusts for amortization and depreciation.

The following is an example of making a cash flow statement using the indirect method:

Example of an Indirect Method Cash Flow Statement

PT ABC JAYA ABADI
STATEMENT OF CASH FLOWS FOR THE YEAR 31 DECEMBER 2021

Cash flow from operations:

Net profit according to profit and loss report IDR 30,000,000
Plus:
Decrease in office supplies IDR 7,000,000
Depreciation expense IDR 2,500,000
Increase in debt costs IDR 5,500,000
Increase in short-term debt IDR 3,000,000,- = Rp. 18,000,000
Less:
Increase in trade receivables Rp. 6,000,000.-
Increase in prepaid expenses Rp. 2,000,000.-
Gain on sales of fixed assets Rp. 7,000,000.-
Decrease in taxes payable Rp. 1,500,000.- = IDR 16,500,000,-
Net cash flow from operating activities IDR 31,500,000

Cash flow from investment :

Added :
Cash in from selling investment : IDR 12,000,000
Less:
Cash out to buy equipment : IDR 8,000,000,-
Net cash flow out for investment activities : IDR 4,000,000

Cash flow from financing

Add:
Cash received from the sale of shares: IDR 20,000,000
Less:
Cash to pay bonds payable: IDR 3,000,000
Cash to pay dividends: IDR 2,000,000 = IDR 5,000,000
Flow net cash inflow from financing activities: Rp 15,000,000
Increase in cash Rp 50,500,000,-
Cash balance at the beginning of the year Rp 60,000,000,-
Cash balance at the end of the year Rp 110,500,000,-

4.3 How to Make a Cash Flow Statement?

To be able to make a cash flow statement you should pay attention to the following things:

  • Accurately calculate the rise and fall of cash
  • Calculating and reporting net cash in the company’s operations using the direct cash report or indirect cash report method
  • Make a calculation of the overall flow of total net cash that is summed up from net cash in funding, operations, and investment from the initial balance until the period ends.

Those are 3 things you need to pay attention to in making a good and correct cash flow report in a trading company. In order to make good financial reports, Sinaumed’s must also be able to analyze financial reports by examining the sections in them. Learn how to do it in full through the book Analysis of Financial Statements.

5. Sample trading company report pdf

Following are some examples of trading company reports in pdf format that you can try to download to serve as a reference for making the trading company reports that you are managing now.

View Sample trading company report pdf=>  View 

You can download all the sample files for the trading company reports above, so you have more references. Then there will be more and more information that is really needed in making financial reports for trading companies.

Related Books Sample Trading Company Reports

Here are 2 recommended financial accounting books related to examples of trading company reports from sinaumedia.com

Trading Company Accounting: Zahir Accounting Program Application Version 6

The elaboration of this book, starting from a brief history of accounting, an understanding of the perspective of accounting, accounting as an information system, to an explanation of the accounting cycle will further complement the readers’ knowledge. In addition, this book also explains the accounting process, financial reports, and the basic accounting equation as the basis for making a good financial report with the support of a well-structured account number.

Computerized Trading Company with MYOB

MYOB trading company accounting computerization is specifically intended for readers who want to use the MYOB application to manage trading company accounting. This book will guide you to be proficient in using MYOB to manage trading company accounting. Through case examples and step-by-step solutions, you will quickly understand the material provided. You can practice the material discussed using the MYOB application version 19, 18, or earlier versions.

In detail, this book discusses:

  • Get to know MYOB Accounting
  • Using MYOB
  • Work with Purchasing Transactions
  • Supplier Payment Transactions
  • Sales Transaction
  • Recording of Receivable Payment Transactions
  • Using MYOB more

Related Material Example of a trading company financial report

That’s the information that we can convey about trading companies along with examples of financial reports from profit and loss reports, balance sheets, cash flow reports and others. Hopefully this article can help you build and develop a trading company better.