Question

Please construct a Profit & Loss Statement for the first six months of the year 2015, on Jeff's Auto Repair with the following information:
   Purchase of spare parts                                                                   $65,000
   Salary paid to mechanics                                                                $127,000
   Commission paid to marketing agents                                        $18,000
   Money received for cars repaired                                                  $245,000
   Money received for storage of cars                                              $45,000
   Sales of tires                                                                                       $84,000
   Rent of shop paid to landlord                                                          $28,000
   Other expenses paid out                                                                   $23,000
   Tax bracket                                                                                             30%

Answer 1

The Profit and loss statement of Jefd's auto repairs

  

Jeff's Auto Repairs

   Profit and loss account

Particulars	$	$
Revenues:
Sales of tires	84,000
Money received for car repaired	245,000
Money received for storage of cars	45,000
Total revenue		374,000
Expenses:
Rent of shop paid to landlord	28,000
Salary paid to mechanics	127,000
Other expenses paid	23,000
Purchase of spare parts	65,000
Commission paid to marketing agents	18,000
Income tax expense	33,900
Less Total expenses		294,900
Net profit		79,100

Income before income tax

= 374,000 - (18,000 + 65,000 + 23,000 + 127,000 + 28,000) = 113,000

30% is tax rate

Income tax expense = 113,000 × 30% = $33,900

$79,100 is net profit of Jeff's Auto repairs

Revenue includes money received for both repairs $245,000 and storage $45,000 of cars and tires sales $84,000. $294,900 is total expenses including tax.

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