ACCT10002 Introduction to Financial Accounting Topic 4

Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

ACCT10002 Introduction to Financial Accounting

Topic 4 – Tutorial Questions

Revenue and Expenses – Profit and Loss Statement

4.1         Explain the contents of the Profit and Loss Statement and its importance to users of financial

statements

4.2         a) Prepare a Profit and Loss Statement from the following information:

Account

Debit

Credit

Cash at bank

2,400

Cost of Goods Sold

5,100

Prepaid expenses

1,200

Sales

10,600

Accrued income

1,000

Rent expense

1,200

Advertising

400

Wages and Salaries

2,400

Accounts payable

1,700

Accounts receivable

1,800

Capital

1,200

Total

14,500

14,500

Profit and Loss Statement

For the Period ending XX/XX/XX

Revenue

a)

a)

Less Cost of Goods Sold

b)

Gross profit

c)

Less Expenses

d)

d)

e)

e)

f)

f)

Total expenses

g)

Net profit

h)

Note: This type of question may be used in either the Quizzes or the Final Exam

b) Calculate the Gross Profit Margin _______(%) and the Net Profit Margin _______(%)

4.3        Apply AASB 15 to the following scenario:

Black Motor Group sells motor vehicles to corporate customers. Its usual practice is to offer these customers a free “maintenance check service” on new vehicles purchased after six (6) months of ownership. This is not included as a term in the sales contract and there is no       specified scope of work for such a service.

Discuss

4.4         Complete the following table by filling in the blanks :

Business A

Business B

Business C

Sales

795,200

814,500

Less Cost of Sales

215,200

Gross Profit ($)

514,000

413,100

502,100

Gross Profit Margin (%)

Less expenses

220,000

Net profit ($)

218,000

198,800

Net Profit Margin (%)

4.5         Discuss how accruals and adjustments make for a better and more relevant Profit and Loss

Statement


2023-02-06