Profit And Loss Statement
Description
This section is from the book "Elementary Banking", by John Franklin Ebersole. Also available from Amazon: Elementary Banking.
Profit And Loss Statement
The profit and loss statement may be defined as an arrangement of the profits or earnings made and of the losses and expenses incurred during a given period as shown by the profit and loss accounts, the major purpose being to show the net gain or loss for the period.
The following may be regarded as a typical statement. The items appearing in it are taken from the trial balance, which has already been explained. It should be noted that asset and liability accounts are not taken into consideration. The numbers to the right of the items are the same as those appearing in the trial balance.
Statement Of Earnings And Expenses Of The Institute National Bank For The Six Months Ending June 30, 1922 | |||
Undivided profits at the close of Dec. 31, 1921...... | $10,600.00 | ||
Earnings: | |||
Domestic Exchange (28)...... | $500.00 | ||
Commissions Collected (29).. .. | 1,000.00 | ||
Interest on Loans (30)........ | 19,000.00 | ||
Discount (31)................ | 6,000.00 | ||
Interest on Investments (32).. . | 3,000.00 | ||
Bond Profits (33)............. | 500.00 | ||
Gross Earnings........................ | ...................... | $30,000.00 | |
Deduct: | |||
Expense (22) (This expense item might be separated into its constituent elements, such as salaries, taxes, etc.)....... | 5,000.00 | ||
6,000.00 | 11,000.00 | ||
Net Earnings (which will be the net increase to undivided profits)............ | 19,000.00 | ||
Undivided Profits at the close of June 30, 1922 | $29,600.00 | ||
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