Question

Construct a profit and loss statement using the following departmental figures and show the dollar amounts for net sales, total cost of goods sold, gross margin, expenses, and profit.

Gross sales $82,000

Customer returns and allowances $4,000

Inward freight $2,000

Workroom costs $1,000

Opening inventory at cost $17,000

Closing inventory at cost $14,000

Purchases at cost $36,000

Cash discounts 8%

Advertising $5,000

Rent $12,000

Salaries $17,000

Miscellaneous expenses $2,500

Answer 1

Profit and Loss Statement
Net Sales:
Gross sales	$             82,000
Less: Customer returns and allowances	$                4,000
Less: Cash discounts [(82000-4000)*8%]	$                6,240
Net sales		$          71,760
Cost of goods sold:
Opening inventory	$             17,000
Add: Purchases	$             36,000
Add: Inward freight	$                2,000
Cost of goods available for sale	$             55,000
Less: Closing inventory	$             14,000
Cost of goods sold		$          41,000
Gross margin		$          30,760
Expenses:
Workroom costs	$                1,000
Advertising	$                5,000
Rent	$             12,000
Salaries	$             17,000
Miscellaneous expenses	$                2,500
Total expenses		$          37,500
Net loss		$          (6,740)