A profit and loss account provides an account of the income and outgoings of the business during an accounting period.The income of a business is usually sales revenue,with the direct costs of generating that income deducted from the total …
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The indirect costs (those that cannot be directly attributed to generating revenue) are then deducted from the gross profit to give a net income figure. A single profit and loss account provides information about how much it costs to generate sales, and how much room for manoeuvre the business has before an increase in the costs of generating those sales causes the business to become unviable (e.g. raw materials may increase to a point where it is no longer financially viable to make a particular product). This can be shown by considering the gross profit as a percentage of the sales revenue. The same can be applied to the indirect expenses of the business. Monitoring these costs can indicate when a particular supplier is becoming too expensive, and the business should look for another supplier who offers better value for money. The net profit figure, as a percentage of the sales revenue indicates the total effect of all costs relating to the business and whether the business continues to be viable and generates profits for the owner (in this case Peter).Peter’s profit and loss account indicates that he rents property rather than owning his own factory or workshop. The depreciation figure is not broken down, which means that the type of assets that are subject to depreciation cannot be seen, although the motor expenses indicate that the business probably owns some form of motor vehicle.
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The cash receipts are sufficient to meet cash payments as soon as the taxi hire rates are raised to $30 per hour from fourth month. The maximum shortfall is in the month of May and that is by $776. Accordingly arrangement of overdraft for around $800 in April for a period of four months will serve the cash requirements of Nod.
The amount of the income tax for the year 30 June 2011 thus becomes: Income tax liability = 30% * $15,500 = $4,650 Requirement 2: Journal Entry: The journal entry for recording the income tax liability in the financial statements of the company is: Dr. Income tax Expense (Statement of Financial Performance) $ 4,650 Cr.
Audit procedures should be consistent with auditing standards. This offers the auditors with guidance on their tasks and acts as a yardstick for the evaluation of the audit work done. When the auditors were carrying out their work on BP p.l.c, they complied with the field standards, general standards and reporting standards n auditing.
The marketing strategies and marketing plans that McDonald's Corporation uses is also looked upon at great details. The report also contains some of the new marketing techniques that McDonald's Corporation has started using in order to further strengthen their position in the market.
The marginal costing system can be referred to as the direct system of costing. Direct because it simply adds up all the directly associated costs with the products and gives the total cost. Generally direct costs consist of direct labor wages, raw material
ndirect method of cash flow preparation; a two-year comparative analysis of the Viacom and Omnicom group cash flow statement; and the identification of the strategies implemented by the two companies based on the result of their cash flow analysis.
The net profit of a company
A higher ratio reflects high sales. Since a grocery deals with fast moving goods, which are perishable, we expect the stock turnover to be higher. In this case then B is the grocery store and A is of manufacturing concern.
A company performance is mostly
The Industrial Revolution of 19th century coupled with an increase in population introduced the development of commercial activities within continents, as well as increased production of goods and services
The paper presents the three issues, in a report format, to the finance director describing the appropriate accounting treatment in the financial statement for the year ended 31 December 2014.
In light of the varying