U2A5 P5, P7
Unit 2 Assignment 5
Income Statement
The cost of sales
This is the closing stock taken from the opening stock and purchases combined. For T-
SHIRTS TO GO this is £108,461 (opening stock + purchases) - £17,586 (closing stock)
which makes the cost of sales for T-SHIRTS TO GO £90,875.
Sales revenue
This is the amount made by selling their goods or services. For T-SHIRTS TO GO, the
sales revenue is £161,626.
Gross profit is the costs of sales taken from the total sales, this is profit before
expenses are taken into account. For T-SHIRTS TO GO this is £161,626 (sales
revenue) - £90,875 (cost of sales) = £70,751 (gross profit).
Total expenses
This is the sum of fixed costs , usually over a year / fixed period of time. For T-SHIRTS
TO GO, this is £53,896.
Net profit before tax
This is the gross profit take the total expenses, this gives you the total profit that the
business has made. For T-SHIRTS TO GO, this is £70,751 (gross profit) - £53,896 (total
expenses), giving T-SHIRTS TO GO the net profit before tax of £16,855.
Statement of financial position
A statement of financial position shows what a company owns and what it owes, the
assets and liabilities, as well as how much the owner has invested into the business.
Non-current assets
Also known as fixed assets, these are the assets which can be useful for the business
for longer than a year, for example premises and vehicles. For T-SHIRTS TO GO, non-
current assets include buildings & equipment and vehicles, which total £176,000.
Current assets
Unit 2 Assignment 5
Income Statement
The cost of sales
This is the closing stock taken from the opening stock and purchases combined. For T-
SHIRTS TO GO this is £108,461 (opening stock + purchases) - £17,586 (closing stock)
which makes the cost of sales for T-SHIRTS TO GO £90,875.
Sales revenue
This is the amount made by selling their goods or services. For T-SHIRTS TO GO, the
sales revenue is £161,626.
Gross profit is the costs of sales taken from the total sales, this is profit before
expenses are taken into account. For T-SHIRTS TO GO this is £161,626 (sales
revenue) - £90,875 (cost of sales) = £70,751 (gross profit).
Total expenses
This is the sum of fixed costs , usually over a year / fixed period of time. For T-SHIRTS
TO GO, this is £53,896.
Net profit before tax
This is the gross profit take the total expenses, this gives you the total profit that the
business has made. For T-SHIRTS TO GO, this is £70,751 (gross profit) - £53,896 (total
expenses), giving T-SHIRTS TO GO the net profit before tax of £16,855.
Statement of financial position
A statement of financial position shows what a company owns and what it owes, the
assets and liabilities, as well as how much the owner has invested into the business.
Non-current assets
Also known as fixed assets, these are the assets which can be useful for the business
for longer than a year, for example premises and vehicles. For T-SHIRTS TO GO, non-
current assets include buildings & equipment and vehicles, which total £176,000.
Current assets
