Income statement

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Income statement

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here is the Statement of Comprehensive Income for Caxio Supplies.

Caxio Supplies
Statement of Comprehensive Income for the year ended 28 February 20.2

	R	R
Sales		$750\,000$
Less: Cost of Sales		$(420\,000)$
Gross Profit		$\mathbf{330\,000}$

Other Operating Income
Rent income	$48\,000$
Commission income	$25\,000$
Interest income	$2\,400$
Total Other Operating Income		$\mathbf{75\,400}$

Operating Expenses
Debtors allowances	$15\,000$
Salaries and wages	$233\,000$
Vehicle expenses	$9\,000$
Consumable stores expense	$5\,400$
Advertising expense	$3\,200$
Bank charges	$4\,330$
Telephone	$3\,600$
Water and electricity expense	$5\,620$
Sundry expenses	$41\,570$
Depreciation - Equipment	$8\,000$
Depreciation - Vehicle	$21\,000$
Loss on trading stock	$5\,000$
Total Operating Expenses		$\mathbf{(359\,720)}$

Profit before Interest Expense		$\mathbf{45\,680}$

Interest expense		$(12\,000)$
Net Profit for the year		$\mathbf{33\,680}$

Calculations for Adjusted Figures:

Calculate Gross Profit.
$\text{Gross Profit} = \text{Sales} - \text{Cost of Sales}$ $\text{Gross Profit} = R750\,000 - R420\,000 = R330\,000$
Calculate Adjusted Other Operating Income.
- Rent income: $R52\,000 (\text{TB}) - R4\,000 (\text{Income received in advance}) = R48\,000$
- Commission income: $R22\,000 (\text{TB}) + R3\,000 (\text{Accrued}) = R25\,000$
- Interest income: $R2\,400 (\text{TB})$
$\text{Total Other Operating Income} = R48\,000 + R25\,000 + R2\,400 = R75\,400$
Calculate Adjusted Operating Expenses.
- Consumable stores expense: $R6\,200 (\text{TB}) - R800 (\text{On hand}) = R5\,400$
- Advertising expense: $R4\,200 (\text{TB}) - R1\,000 (\text{Prepaid}) = R3\,200$
- Bank charges: $R3\,900 (\text{TB}) + R430 (\text{Correction from Sundry Expenses}) = R4\,330$
- Water and electricity expense: $R5\,100 (\text{TB}) + R520 (\text{Accrued}) = R5\,620$
- Sundry expenses: $R42\,000 (\text{TB}) - R430 (\text{Incorrectly debited bank charges}) = R41\,570$
- Depreciation - Equipment: $R8\,000$ (from adjustment)
- Depreciation - Vehicle: $R21\,000$ (from adjustment)
- Loss on trading stock: $R5\,000$ (from adjustment)
$\text{Total Operating Expenses} = R15\,000 + R233\,000 + R9\,000 + R5\,400 + R3\,200 + R4\,330 + R3\,600 + R5\,620 + R41\,570 + R8\,000 + R21\,000 + R5\,000 = R359\,720$
Calculate Profit before Interest Expense.
$\text{Profit before Interest Expense} = \text{Gross Profit} + \text{Total Other Operating Income} - \text{Total Operating Expenses}$ $\text{Profit before Interest Expense} = R330\,000 + R75\,400 - R359\,720 = R45\,680$
Calculate Net Profit for the year.
$\text{Net Profit for the year} = \text{Profit before Interest Expense} - \text{Interest expense}$ $\text{Net Profit for the year} = R45\,680 - R12\,000 = R33\,680$

Income statement

Step-by-step solution

Calculate Gross Profit.

Calculate Adjusted Other Operating Income.

Calculate Adjusted Operating Expenses.

Calculate Profit before Interest Expense.

Calculate Net Profit for the year.

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