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9. Abnormal Gains r26 There may be capital gains arising during the course of the year, c.g., profit arising out of sale of a fixed asset. Such profit is shown as a separate income on the credit side of the Profit and Loss Account. 6.4.2 Closing entries for Profit and Loss account ) For transfer of various expenses to profit & Loss A/C Profit and Loss A/C Dr. To Various Expenses A/C (Being various indirect expenses transferred to Profit and Loss Account) For transfer of various incomes and gains Profit & Loss A/C Various Incomes & Gains A/C Dr. To Profit & Loss A/C (Being various incomes & gains transferred to Profit and Loss Account) For Net Profit Profit & Loss Alc To Capital A/C (Being Net Profit transferred to capital) (b) For Net Loss Capital A/c To Profit & Loss A/C (Being Net Loss transferred to Capital Account) Illustration 11: From the following balances extracted at the close of year ended 31 March, 2006, prepare Profit and Loss Account as at that date: Rs. Rs Gross Profit 51,000 Discount (Dr.) 500 Carriage Outward 2,500 Apprentice Premium (Cr.) 1,500 Dr. DE 250 350 Salaries Rent Fire Insurance Premium Bad Debts Commission Received 5,500 Printing & Stationary 1,100 Rates & Taxes 900 Travelling Expenses 2,100 Sundry Trade Expenses 1,000 Discount allowed by Creditors 200 300 800

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