Mastering Profit and Loss

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If we record the ROG dating on the date when the goods arrive, how about for ordinary and EOM? on the date of ()?

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A company purchased office supplies on account for $5,000 with credit terms of 2/10, n/30. If the company pays the invoice within the discount period, what amount will they remit?

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You bought 56,000 worth of T-shirts in Laguna. You were invoiced on January 28, 2023, you received your T-shirts on February 2, 2023. You then paid your invoice on February 6, 2023. How much is your discount if the cash discount is 6/10, 4/15, n/30, EOM.

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You bought 56,000 worth of T-shirts in Laguna. You were invoiced on January 28, 2023, and you received your T-shirts on February 2, 2023. You then paid your invoice on February 10, 2023. How much is your discount if the cash discount is 6/10, 4/15, n/30, ROG

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A smartphone is priced at ₱12,000, and a store is offering a 12% discount. Calculate the trade discount and the total amount the customer needs to pay

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A supplier offers a trade discount of 15% on the listed price of an electronic gadget. If the gadget's listed price is P5,000, calculate the total amount the customer has to pay after the trade discount.

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A retailer purchased a luxury watch for 12,000 and marked it up by 40%. After some time, the retailer decided to offer a 25% discount on the marked-up price to attract more customers. However, the retailer wants to maintain a profit margin of 30% on the discounted price. Calculate the final selling price after the discount. Identify the Mark-on, Mark-up, and Mark-down, then compute the final selling price

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You are to buy merchandise at two stores, which store are you going to buy? Store A Merchandise is priced at 50 pesos per unit offering a 5% trade discount for every 200 unit purchase. Store B Merchandise is priced at 48 pesos per unit offering a 20% trade discount above 200 unit purchase. Justify your choice through a computation.

Profit and Loss

Statement pf Comprehensive Income, Income statement

Introduction to Profit and Loss

• Profit and Loss is a financial statement that shows a company's revenues, expenses, and net income over a specific period.

• It helps businesses analyze their financial performance and make informed decisions.

• Understanding profit and loss is crucial for effective financial management.

• Key components include revenue, cost of goods sold, operating expenses, and net income.

Multiple Choice

What does the Profit and Loss statement help businesses analyze?

• Cash flow

• Financial performance

• Market trends

• Employee satisfaction

Multiple Choice

The total amount of money a company generates from the sale of its goods or services.

• COGS

• Revenue

• Operating expenses

• net income

Multiple Choice

the costs of running a business, such as rent, utilities, salaries, and marketing expenses.

• COGS

• Revenue

• Operating expenses

• net income

Multiple Choice

the direct cost of producing the goods or services that a company sells. It includes the cost of materials, labor, and overhead.

• COGS

• Revenue

• Operating expenses

• net income

Multiple Choice

the profit that a company has left over after all of its expenses have been paid

• COGS

• Revenue

• Operating expenses

• net income

Profit and Loss:

Market trends can be analyzed through the Profit and Loss statement. It helps businesses understand their financial performance and cash flow. However, it does not directly measure employee satisfaction. The Profit and Loss statement is a crucial tool for businesses to evaluate their financial health and make informed decisions.

Understanding Profit and Loss

• Cost Price: The price at which a product is purchased
• Selling Price: The price at which a product is sold
• Profit: Selling Price - Cost Price
• Loss: Cost Price - Selling Price

Multiple Choice

What is the formula for calculating profit?

• Selling Price - Cost Price

• Cost Price - Selling Price

• Selling Price + Cost Price

• Selling Price / Cost Price

Profit Formula:

• Profit is calculated by subtracting the Cost Price from the Selling Price.
• Formula: Selling Price - Cost Price
• Profit represents the financial gain made from a business transaction.

Calculating Profit and Loss

• Profit: Revenue - Cost
• Loss: Cost - Revenue
• Gross Profit: Revenue - Cost of Goods Sold
• Net Profit: Gross Profit - Expenses
• Break-even Point: Revenue = Cost

Multiple Choice

What is the formula for calculating Gross Profit?

• Revenue - Cost

• Cost - Revenue

• Revenue - Cost of Goods Sold

• Gross Profit - Expenses

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ABC Electronics sold 500 units of their latest smartphone model, each priced at ₱10,000. The cost of goods sold (COGS) per unit was ₱6,000. Given that operating expenses amount to ₱300,000 what is the net income of the company?

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XYZ Clothing Store purchased a batch of dresses for ₱200,000. However, the operating expenses amounted to ₱50,000. Calculate the gross profit, net income, and cost of goods sold (COGS). If the gross profit margin is 40%, find the total sales revenue.

Applications of Profit and Loss

• Cost-Volume-Profit Analysis: Helps determine the breakeven point and profit potential of a business.
• Investment Analysis: Evaluates the profitability of potential investments.
• Pricing Strategies: Determines optimal pricing to maximize profit.
• Financial Statement Analysis: Assesses the financial health of a company using profit and loss data.

Multiple Choice

Which financial analysis tool assesses the financial health of a company using profit and loss data?

• Cost-Volume-Profit Analysis

• Investment Analysis

• Pricing Strategies

• Financial Statement Analysis

Financial Statement Analysis

Trivia: Financial Statement Analysis is a tool used to assess the financial health of a company. It analyzes profit and loss data to evaluate the company's performance and make informed decisions. It helps investors, creditors, and managers understand the company's profitability, liquidity, and solvency. Key ratios like profitability ratios, liquidity ratios, and solvency ratios are used in this analysis.

Break-Even Analysis

Break-even analysis is a financial tool used to determine the sales level needed for a company to cover its total costs. It is a simple yet powerful tool that can be used to make informed decisions about pricing, production, and marketing.

To determine the break-even point, we shall make use of the ff. concepts

Gross Profit= Sales/revenues- Variable cost
Gross Profit- fixed costs= 0 (Breakeven Point)
Sales/ revenues= Variable Cost +Fixed cost


# of units sold(x)= Fixed Cost(FC) / Unit price (P) - Variable cost per unit (V)
x= FC/ P-V

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ABC Furniture Company produces handmade wooden chairs. The company incurs a fixed cost of ₱50,000 per month, which includes rent, salaries, and other fixed expenses. The variable cost per chair is ₱200, and each chair is sold for ₱500. How many chairs do you need to sell to break-even?