Profit and Loss Statement Exercise
Profit and Loss Statement Answer
Fishbourne Marketing
1) Cost of Goods Sold reduces Gross Sales to arrive at Total Income.
2) Net Income would increase by $5,000.
3) Net Income would increase by $5,000.
Profit and Loss Statement
Fishbourne Marketing
January 1, 2014 to December 31, 2014
| Income | ||
|
|
|
|
| Gross Sales
|
$323,789.40
|
|
| Less Returns and Allowances |
$10,000.00
|
|
| Net Sales |
|
$313,789.40
|
|
|
|
|
| Cost of Goods |
|
|
| Merchandise |
|
|
| inventory, January 1 |
$160,000.00
|
|
| Purchases |
$90,000.00
|
|
| Freight Charges |
$2,000.00
|
|
| Total Merchandise Handled |
$252,000.00
|
|
|
|
|
|
| Less Inventory, December 31 |
-$100,000.00
|
|
| Cost of Goods Sold |
|
$152,000.00
|
| Gross Profit |
|
$161,789.40
|
|
|
|
|
| Interest Income |
$2,500.00
|
|
| Total Income |
|
$164,289.40
|
|
|
|
|
| Expenses |
|
|
| Salaries |
$50,360.40
|
|
| Utilities |
$5,800.00
|
|
| Rent |
$23,000.00
|
|
| Office Supplies |
$2,250.00
|
|
| Insurance |
$3,900.00
|
|
| Advertising |
$8,650.00
|
|
| Telephone |
$2,700.00
|
|
| Travel and Entertainment |
S$2,550.00
|
|
| Dues and Subscriptions |
$1,100.00
|
|
| Interest Paid |
$2,100.00
|
|
| Repairs and Maintenance |
$1,250.00
|
|
| Taxes and Licenses |
$35,589.00
|
|
| Total Expenses |
|
$139,289.40
|
|
|
|
|
| Net Income |
|
$25,000.00
|
