Profit and Loss Statement Paper

Topics: Revenue, Generally Accepted Accounting Principles, Net income Pages: 4 (940 words) Published: January 23, 2013
Justin Fondriest
Professor Timothy Groves
October 21, 2012

Profit and Loss Statement Paper

Before beginning, it should be noted that although this project is to be for a Profit and Loss (P&L) Statement, only an Income Statement is available at the Kudler Fine Foods website (Apollo Group, 2011). However, Income Statements and P&L Statements are, for all intents and purposes, the same thing.

With that said, it cannot be determined conclusively by reading the Income Statement for Kudler Fine Foods if the report is monthly, quarterly or yearly—or if the reports are constructed on a different fiscal schedule. The date at the top, however, reads “For the Year Ended December 31, 2003”. For this reason, it was determined to treat this report as an annual report with a fiscal year ending December 31, 2003.

An Income Statement is important to a company because it is used to record and calculate the costs, expenses, taxes and profits of a company over a specified period of time (Nickels, W. G. et al. 2010). It breaks down into an itemized list, these expenditures and profits so readers may easily follow the flow of information. Income Statements have the following parts:

• Revenue

• Cost of Goods Sold (COGS)

• Gross Profit

• Operating expenses/ Net Operating Income

• Net Operating Income/Net Income

The information below will cover the significance of each of these 5 parts and will speak to the importance of each with regard to Kudler Fine Food’s performance in 2003.


The Revenue of Kudler Fine Foods consists of Gross Sales minus Sales Returns and Allowances. This is to mean that Sales Returns and Allowances are subtracted from whole amount of money brought in through all sales (Gross) made over the course of the year. Sales Returns and Allowances are significant in calculating revenue because they represent the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • The Use of Profit and Loss Statements Essay
  • Essay on Impacts to the Profit and Loss Statement
  • Profit and Loss Essay
  • Impacts to the Profit and Loss Statement Essay
  • profit and loss account Essay
  • Balance Sheet Profit Loss Essay
  • Profit and Loss Accounts Research Paper
  • Profit and Loss Essay

Become a StudyMode Member

Sign Up - It's Free