Complete a skeletal P&L; given the following information: Cost of Goods Sold: $1

Question

Complete a skeletal P&L; given the following information: Cost of Goods Sold: $189, 250 Gross Margin: $143, 500 Operating Expenses 32% Set up a complete P&L; statement using the following figures: Opening Inventory (cost) $25,000 Closing Inventory (cost) $19,000 Gross Sales $83,000 Customer R&A; $750 Purchases (cost) $65,000 Freight (Transportation) $1, 250 Salaries (Selling & Buying) $8, 250 Rent & Utilities $6, 400 Cash Discounts Received $1, 200 Miscellaneous Expenses $250 Analyze the results obtained. What might the business consider if it desires to improve its profitability? If customer R&A; in the handbags department totaled $11, 500 and net sales were calculated at $142,000, determine gross sales.

Explanation / Answer

3.

Cost of goods sold (COGS)= $189,250

Gross Margin (M) = $143,500

Operating Expenses (OE) : 32% of the Gross sales

Gross sales = COGS+M+OE

COGS+M = $332,750

COGS+M is 68% of the Gross sales

Gross sales = $332,750/68% = $489,338.24

Operating expenses = $156,588.24

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