Accounting | Income Statement | Assignment

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Accounting

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Table of Contents
Income statement.......................................................................................................................3
Statement of owner’s equity.......................................................................................................3
Goals achievement.....................................................................................................................3
References..................................................................................................................................5
Appendix....................................................................................................................................6

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Income statement
Income statement for the year ending 31st July 2020
Particulars Amount
Sales 1714400
Cost of goods sold:
Opening stock 785000
Add: purchases 1306000
Less: closing stock 624000 1467000
Gross profit 247400
Operating expenses:
General expenses 305250
Selling expenses 319750 625000
EBIT -377600
Interest income 2150
Interest expense 20200 -18050
Net income/(loss) -395650
Statement of owner’s equity
Particulars Amount
Capital account (R. Hard rock) 953400
Less: Drawings 101300
Less: Net loss -395650
Capital account closing balance 456450
Goals achievement
Gross margin: This is the ratio that shows the gross profit as a percentage of sales which is
made (Batchimeg, 2017). The company has set the goal of 31.5% for the gross margin which
shall be attained. To identify the performance calculation will be made which is as follows:
Gross margin = Gross profit/sales *100
= 247400/1714400
= 14.43%
It can be noted that the target is not met and there is a gross margin of 14.43% which is
maintained.