Complete the profit statement.
PROFIT STATEMENT FOR AUGUST 2014
SALE: cash K credit K
Add: Stock at 3/2/14
Purchase K cash K credit K XX K
Less: Stock at 28/2/14
Cost of Goods Sold K
Less: Other expenses K K
NET PROFIT: K
Answer (2)
To complete the profit statement for August 2014, we need to use the provided financial information to calculate sales, purchases, cost of goods sold, and other related expenses to determine the net profit. Let's break it down step by step.
Profit Statement for August 2014
Sales :
Cash sales are given as K2,000 .
Credit sales are given as K80 .
Therefore, total sales = cash sales + credit sales = 2 , 000 + 80 = K2,080 .
Stock at the beginning of the period (3/2/14):
Opening stock is K500 .
Purchases :
Cash purchases are given as K207 .
Credit purchases are given as K400 .
Therefore, total purchases = cash purchases + credit purchases = 207 + 400 = K607 .
Stock at the end of the period (28/2/14):
Closing stock is K600 .
Cost of Goods Sold (COGS) :
COGS is calculated as: COGS = Opening Stock + Purchases − Closing Stock = 500 + 607 − 600 = K507
Other Expenses :
Given other expenses are K150 .
Net Profit Calculation :
Net Profit = Total Sales - COGS - Other Expenses
= 2 , 080 − 507 − 150 = K1,423
Therefore, the net profit for August 2014 is K1,423 .
To complete the profit statement for August 2014, follow a step-by-step breakdown of sales, stock levels, purchases, and expenses to determine net profit. Calculate the total sales by adding cash and credit sales, then compute cost of goods sold using the provided stock and purchase values. Finally, deduce the net profit by subtracting COGS and other expenses from total sales.
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