HW #2_Profit & Loss_ P & L Problems

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University of Missouri, Columbia *

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2300

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Finance

Date

Feb 20, 2024

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docx

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Uploaded by DeaconLarkMaster1007

HOMEWORK #2 PROFIT AND LOSS PROBLEMS The following P & L charts are for a clothing business that has a separate P & L for the website and for the brick and mortar store. 1. (2 pts) Fill in the blanks as requested and answer the question: Each problem is worth 0.5 pts. $$$ % Gross Sales 236,250 Returns 11,250 5% Net Sales 225,000 100% (a) What is the Gross Sales? $236,250 (b) What is the return %? 5% (c) What is the Net Sale %? 100% (d) Do you think this P&L represents the website or the store, and why? I think this P&L represents a website as it doesn’t have the COGS which includes the import duty, workroom costs, etc. 2. (2pts) Fill in the blank and then answer the question . Each problem is worth 0.5 pts. $$$ % Net Sales 225,000 100 COGS 132,750 59% Gross Margin 92,250 41%

(a) What is the Net sales %? 100% (b) What is the COGS $? $132,750 (c) What is the Gross Margin %? 41% (d) What is the relationship between the COGS and the GM as they pertain to Net Sales? The relationship between COGS and GM is that when you add the 2 numbers up they equal the net sales. 3. (3 pts) Fill in this complete P & L. Each problem is worth 1 pts. $$$ % Gross Sales 156,000 Returns 36,000 30% Net Sales 120,000 100% COGS 70,800 59% Gross Margin 49,200 41% Expenses 42000 35% Operating Profit 7,200 6% (a) What is the Gross Sales? $156,000 (b) What is the COGs %? 59% (c) What is the Gross Margin $? $49,200 (d) What is the Gross Margin %? 41% (e) What is the Expenses %? 35% (f) What is Operating Profit $? $7,200

Cost of Goods Sold (COGS) 4. [0.5 pt] The ABC Company had net sales of $80,000 for the year, and their cost of goods sold (COGS) is $35,000. Calculate the gross margin for the ABC Company. The gross margin for the ABC Company is $45,000. 5. [1 pt] XYZ Corporation had net sales of $500,000 for the year. Their COGS includes $45,000 for freight , $10,000 for import duty , and $25,000 for workroom costs . They also received a trade discount of $15,000 . Calculate the gross margin for XYZ Corporation. * Demonstrate the process of arriving at your answers by providing step-by-step explanations using bullet points. $45,000 + $10,000 + $25,000 = $80,000 $80,000 - $15,000 = $65,000 $500,000 - $65,000 = $435,000 The gross margin for the XYZ corporation is $435,000. 6. [1.5 pt] The QRS Corporation, an international retailer, reported net sales of $2,000,000 for the year. Their COGS included $100,000 for cost of goods, $20,000 for freight, $15,000 for import duty, and $50,000 for workroom costs. They also received a trade discount of $30,000. Calculate the gross margin percentage for QRS Corporation and determine if it's increased or decreased compared to the previous year when they had a gross margin percentage of 55%. * Please demonstrate the process of arriving at your answers by providing step-by-step explanations using bullet points.

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$100,000 + $20,000 + $15,000 + $50,000 = $185,000 $185,000 - $30,000 = $155,000 $2,000,000 - $155,000 = $1,845,000 $1,845,000/$2,000,000 = 0.92 -> 92% The gross margin increased since the year prior from 55% to 92%.