P5 – Profit & Loss and Balance Sheet
Profit and Loss Sheet:
| |£ |£ | |Sales: | |80,000 | | | | | |Less Cost of Sales: | | | |Opening stock |32,000 | | |Purchases |6,000 | | |Less Closing stock |(5,000) |33,000 | | | | | |Gross Profit: | |47,000 | | | | | |Less Expenses: | | | |Rent and Rates |10,000 | | |Advertising |500 | | |Miscellaneous |500 | | |Utility |1,000 | | |Salary |20,000 |32,000 | | | | | | | | | |Net profit before Tax: | |15,000 |
The table above shows the profit and loss information sheet. And on this includes gross profit for Surbiton Art Works which stands at £47,000. to calculate this figure you subtract the less cost of sales from the value of sale.
The cost of sales is calculated by adding opening stock which is £32,000 to purchases during the year and in this case it is £6,000 and this figure added to the opening stock gives you the total of £38,000. and to calculate the cost of sales you have to subtract the closing stock which is £5,000: £38,000-£5,000= £33,000. Then to get the gross profit you take away the £33,000 from the...
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