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    Income Statement (Students Copy)

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    Jireh Arafol
    This power point slides is very helpful when you need to make an income statement on your business and a guide for students.

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    Income Statement (Students Copy)

    Uploaded by

    Jireh Arafol
    72 views19 pages
    This power point slides is very helpful when you need to make an income statement on your business and a guide for students.

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    Income Statement [Students Copy]

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    This power point slides is very helpful when you need to make an income statement on your business and a guide for students.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    72 views19 pages

    Income Statement (Students Copy)

    Uploaded by

    Jireh Arafol
    This power point slides is very helpful when you need to make an income statement on your business and a guide for students.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 19

    Income Statement

    Income Statement
    The Income Statement shows the company’s profit
    and loss over a period of time.

    The income statement is also known as


    the statement of income, statement of earnings,
    statement of operations, profit and loss statement,
    Princess Beauty Shop HEADER
    Statement of Financial Position
    For the Period Ended December 31, 2015

    Sales xxx
    Less: Sales return and allowances xxx
    Sales discounts xxx __xxx__
    BODY
    Net Sales xxx
    Less: Cost of goods sold __xxx__
    Gross Profit xxx
    Less: Operating expense __xxx__
    Net income (loss) xxx
    Following major sections

    •Income or revenue section

    •Cost of goods sold

    •Operating expense
    Income or Revenue Section

    •Sales

    •Sales Return And Allowances

    •Sales Discounts
    Revenue/Sales

    Sales revenue is the income received by a


    company from its sales of goods or the
    provision of services.
    Cost of Goods Sold Section

    measures the “direct cost” incurred in the


    production of any goods or services.

    It includes material cost, direct labor cost,


    and direct factory overheads, and is
    directly proportional to revenue.
    Gross profit
    (sometimes referred to as the statement
    of profit and loss)

    It is calculated by subtracting Cost of Goods


    Sold (or Cost of Sales) from Sales Revenue.
    To illustrate:
    As of December 31, 2018, ABC Bicycle company has sold 200
    units for a total of $60,000 in sales revenue.

    However, it has incurred $25,000 expenses both for spare parts


    and materials as well as direct labor costs.

    There were also returns and allowances for a total of $1,000.


    Compute for the gross profit.
    ABC Bicycle Company
    Statement of Financial Position
    For the Period Ended December 31, 2018

    Sales $ 60,000
    Less: Sales return and allowances $1,000 1,000
    Net Sales 59,000
    Less: Cost of goods sold 25,000
    Gross Profit $ 34, 000
    Operating Expense Section

    This presents the different expenses incurred by the business


    during the period.

    •Salaries and wages


    •Utilities
    •Supplies
    •Taxes and license
    •Travelling
    •Doubtful account
    •Depreciation expense
    •Gasoline and oil
    Inventory Account

    Inventory refers to goods that remain unsold


    or unconsumed at the end of the accounting
    period
    3 Types of Inventory Account in Manufacturing Business

    Raw materials inventory of raw materials that


    were not used or consumed on December 31.

    Work-in-process inventory of raw materials


    that have not been started remained
    unfinished on December 31.

    Finished goods inventory of goods that have


    been completed but remained unsold on
    December 31
    Net income is the amount of accounting profit a
    company has left over after paying off all its
    expenses.

    Net income is the last line item on the income


    statement proper.
    ACTIVITY: Prepare Income Statement
    Modern Laundry Center
    Trial Balance
    December 31, 2016

    Cash P 66 000
    Accounts Receivable 80 000
    Notes Receivable 20 000
    Laundry Equipment 48 000
    Office Furniture 28 000
    Accounts Payable 38 000
    Jenny Toledo, Capital 68 000
    Laundry Service Income 175 300
    Laundry Supplies Expense 11 800
    Rent Expense 3 000
    Salaries And Wages 16 000
    Utilities Expense 3 500
    Taxes And Licenses 5 000
    Total P 281 300 P 281 300
    Modern Laundry Center
    Income Statement
    December 31, 2016

    Laundry service income P 175 300


    Less: Cost of laundry service
    Direct labor-salaries of workers P 16 000
    Laundry supplies 11 800
    Utilities supplies 3 500 31 300
    Gross Profit P 144 000
    Less: Operating expense
    Rent expense P 3 000
    Taxes and license 5 000 8 000
    Net income P 136 000
    Thank you
    Questions?

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