|Business Administration - Basic Skills Guide (SKAT, 1994, 119 p.)|
|Module 5 - Profit and loss statement|
Mr. Garcia decides on preparing a profit and loss statement for the first quarter of 1992. For that reason he is looking for the figures needed to do so:
1. Value of Stock
On the 1st of January Mr. Garcia counts his stocks. He has the following raw materials:
· 20 bags of cement,
· 10 m3 of sand,
· 50 kg of colorants,
· 20 m of wire,
· 1000 tiles.
Next, Mr. Garcia checks his records to find out how much he paid for each item:
· He paid LU 80000 for 200
bags of cement,
· He paid LU 6000 for 12 m3 of sand,
· Each kg of colorant costs LU 100,
· 100 m of wire cost LU 5000.
Using this information Mr. Garcia determines that it cost LU 18000 to produce 1000 tiles.
What is the value of Mr. Garcias stock on the 1st of January? To find the answer to this question, make a copy of the Stock Record Format, and use the figures given above. Below, you will find the answer.
Now, make a copy of the Profit and Loss Statement Format and enter the figure in the field Initial Value of Stock.
Mr. Garcia also determines the stock on the 31st of March and finds that it is LU 20000. Please enter this figure in the field Final Value of Stock in the profit and loss statement.
2. Depreciation of Equipment and Workshop
Yearly Depreciation ($)
What is the yearly and quarterly depreciation, when the exchange rate is 100? Please enter the figure for the quarterly depreciation into the profit and loss statement in the field Depreciation.
3. Cash Transactions
Please prepare a cash book for Garcias Tile Factory. Enter the following cash transactions in the cash book and determine the transaction codes used for the profit and loss statement.
Remember: Investments and repay of loans are not expenses and, therefore, do not make part of the profit and loss statement.
· On the 1st of January there are LU 60000 in the cash box.
· On the 5th of January Mr. Garcia buys plastic sheets for LU 5000. The voucher number is 101.
· On the 10th of January Mr. Brown pays last years invoice. The amount is LU 100000 and the invoice number is 356.
· On the 15th of January 200 bags of cement are delivered. Mr. Garcia pays LU 75000. The invoice number is 102.
· On the 25th of January Mr. Garcia pays his workers: LU 30000. The voucher number is 103.
· On the 3rd of February, Mr. Garcia buys office material for LU 2000. The voucher number is 104.
· On the 7th of February, Mr. Garcia starts an advertising action in the newspaper Daily Mail and pays LU 18000. The invoice number is 105.
· On the 12th of February, Mr. de Rivero fetches his tiles and pays LU 150000. The invoice number is 106.
· On the 18th of February, Mr. Garcia pays LU 5000 for transport. The invoice number is 107.
· On the 21st of February, new moulds are delivered. Mr. Garcia pays LU 70000. The invoice number is 108.
· On the 25th of February, Mr. Garcia pays his workers: LU 30000. The voucher number is 109.
· On the 28th of February, Mr. Domingues pays LU 100000 for tiles he received. The invoice number is 110.
· On the 8th of March, 20m3 of sand are delivered. They cost LU 5000. The invoice number is 111.
· On the 11th of March, Mr. Garcia pays for the repair of his vibrating table LU 10000. The invoice number is 112.
· On the 1 7th of March, Mr. Garcia has to pay the water fee of LU 10000. The invoice number is 113.
· On the 25th of March, Mr. Garcia pays his workers: LU 30000. The voucher number is 114.
· On the 30th of March, the interest for the first quarter has to be paid: LU 15000. The invoice number is 115.
· On the 31th of March, Mr. Garcia decides to draw LU 20000. The voucher number is 116.
4. Profit and Loss Statement
Please prepare now the profit and loss statement for Garcias Tile Factory for the period from the 1st January to the 31st of March.
All the information you need to prepare the profit and loss statement is given above.
5. Answers to the Exercises
a. Stock Record
The total yearly depreciation is $ 600. The quarterly depreciation is one forth of that:
quarterly depreciation = yearly depreciation / 4 = 600 LU / 4 = LU 150
With an exchange rate of 100, the quarterly depreciation is 150 x 100 = LU 15000. This figure is entered into the profit and loss statement.
c. Cash Book
d. Profit and Loss Statement
Profit and loss statement