11.2 Format of the Income Statement
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The document describes the format of an income statement, including sections for revenue, cost of goods sold, gross profit, stock gains/losses, adjusted gross profit, other expenses, and net profit. It provides an example income statement for the month ended June 30, 2015, with numerical values. The document notes that this is a classified income statement that separately calculates gross profit, adjusted gross profit, and net profit. It also explains the link between the income statement and the owner's equity section of the balance sheet.
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11.2 Format of the Income Statement
- 1. 11.2 FORMAT OF THE INCOME STATEMENT
- 2. © Michael Allison, Trinity Grammar School. Author’s permission required for external use The format of the Income Statement is: 11.2 FORMAT OF THE INCOME STATEMENT Revenue Cost of Goods Sold Gross Profit Stock Gain or Stock Loss Adjusted Gross Profit Other Expenses Net Profit - + or - = = - =
- 3. © Michael Allison, Trinity Grammar School. Author’s permission required for external use The format of the Income Statement is: Revenue Cost of Goods Sold Gross Profit Stock Gain or Stock Loss Adjusted Gross Profit Other Expenses Net Profit - + or - = = - = Income Statement for the month ended 30 June 2015 $ $ Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 11.2 FORMAT OF THE INCOME STATEMENT
- 4. © Michael Allison, Trinity Grammar School. Author’s permission required for external use This is called a Classified Income Statement It has separate calculations for three types of profit… Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Gross Profit Adjusted Gross Profit Net Profit Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 11.2 FORMAT OF THE INCOME STATEMENT
- 5. © Michael Allison, Trinity Grammar School. Author’s permission required for external use There is a link between the Owner’s Equity section of the Balance Sheet and the Income Statement… Balance Sheet as at 31 December 2015 $ $ Owner’s Equity Balance Sheet as at 31 December 2015 $ $ Owner’s Equity Capital 120000 Balance Sheet as at 31 December 2015 $ $ Owner’s Equity Capital 120000 plus Net Profit (Loss) 2500 Balance Sheet as at 31 December 2015 $ $ Owner’s Equity Capital 120000 plus Net Profit (Loss) 2500 122500 Balance Sheet as at 31 December 2015 $ $ Owner’s Equity Capital 120000 plus Net Profit (Loss) 2500 122500 less Drawings 13000 Balance Sheet as at 31 December 2015 $ $ Owner’s Equity Capital 120000 plus Net Profit (Loss) 2500 122500 less Drawings 13000 109500 Income Statement for the month ended 30 June 2015 $ $ Revenue Cash sales 15000 Credit sales 7000 22000 less Cost of Goods Sold Cost of sales 13000 Cartage inwards 1000 14000 Gross Profit 8000 less Stock loss 500 Adjusted Gross Profit 7500 less Other Expenses Rent 2000 Wages 3000 5000 Net Profit 2500 11.2 FORMAT OF THE INCOME STATEMENT
- 6. © Michael Allison, Trinity Grammar School. Author’s permission required for external use TASK In-class Homework SQ4 X Ex11.1 X Ex11.3 X