Topics: Income statement, Revenue, Certified Public Accountant Pages: 4 (685 words) Published: May 16, 2015

Laurent Bailey
ACC 501
Module 1 Case
May 9, 2015
Mr. Dixit

To: Serious Reader Company
From: Laurent Bailey, Sr. Accountant
Date: May 4, 2015
Subject: Quarterly Review

Serious Reader Company,
I’ve attached our completed income statement to this email, but I also wanted to quickly discuss the outcome your results. Overall Result
Over the past year you have sold 4300 books, which look great on the surface. However you have experienced a severe profit loss. From the data that I have gathered from you records, your category D and E books are not doing as well as the other categories of books. You had a total loss of $9000 from those two categories of books. Although your income statement is showing a higher number of book sales in Category D and E, it is costing you more to purchase the books vs selling them. 90 % Sold

The second page of your income statement shows results with a little manipulation. Using the same numbers from your original statement, I am able to show you what your income would look like if 90% of all you book were sold. As you can see you profit would increase tremendously. You’ll experience a $36,900 profit increase by just increasing the sales. 50% Markup

Lastly, the final page of your income statement shows what your profits would be if you did a 50% markup from you original sales prices. This is where you can maximize your profits. Based on your original numbers, you will clear $99900. If you mark up your prices, your D and E categories that were hindering you initially would have you soaring. Recommendation

My recommendation for maximum profit would be to mark your prices up 50%. This would be your best bet if you would like to quit your other job and turn this into a full time business. However, you must note that you would have more time to travel so your travel expenses would definitely rise. Also take in...
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