You have been asked to produce a Profit & Loss Statement for Bayford Fashion for the year to 31 March2021, a business selling clothing both directly to UK retailers and online direct to consumers. Most of theproduct is imported from Asia. You have been provided with the information below from which you need todetermine how to use for the production of the required statement.Amount & Further InformationThe company sells an average of 15,400 garments a monthto retailers and 6,250 garments a month to onlinecustomers.The average selling price of each garment to retailers is£24 (excluding VAT) and £57.60 (including VAT at 20%) toonline customers.ItemSales VolumePricingUnit CostThe average cost of each garment is £9 including all importduties. Delivery and packaging costs to the customersaverage £0.5 per garment for retailers and £1.50 for onlinecustomers.The premises are rented and cost £105,000 a month paidquarterly in advance on the 1st January, 1st April, 1st Julyand 1st October.The company has 55 employees with an average salary of£28,000 a year. During the year £12,000 in total wasPremisesSalariesloaned to staff for various reasons and the balance was stilloutstanding at the year-end. The company has two bank loans in place. Loan A had anaverage outstanding balance of £1.2m and the interest onthis was a flat rate 7% per annum. Loan B had an averageoutstanding balance of £250,000 and the interest on thiswas a flat rate 5% per annum. During the year £217,500 ofcapital on both these loans was repaid in proportion to therespective loan sizes.The Fixed Assets in the business originally cost £820,000 intotal. These are still being depreciated on a Straight Linebasis over 8 years. (Assume the all assets were purchasedat the same time and have not yet been fully depreciated).The company spent £290,000 marketing to onlineconsumers and £180,000 marketing to retailers during thePayments to the BankDepreciationSales & Marketingyear.A further £160,000 of various other operating costs wereincurred during the year. In addition, a further £20,000 ofinvoices had been received in March 2021 for supplies tobe delivered in April and May 2021.Other ExpenditureTravel Costs£146,000 was spent on Travel during the period to 31March 2021. However, £7,000 of this was an advancepayment for a Business Class flight to Hong Kong for theCEO to meet the company's main supplier later in June.Historically this runs at £10,000 a month, although as atthe year-end date, three months of invoices have not beenreceived from the accountancy supplier despite theservices having been used.One major retailer customer appears to be in severefinancial difficulty and has an outstanding balance of£200,000 which is now four months overdue. The SalesDirector, who knows the customer very well, assures youthat the amount will be paid off soon and that you shoulddefinitely not be concerned.AccountancyBad DebtsUsing the details shown above:Create a Profit & Loss Statement for the year to 31 March 2021. You must show Sales, Gross Profit,and Gross Margin (%) by each sales sector; all relevant cost items in the statement; Total Costs,EBITDA (Earnings Before Interest Depreciation & Amortisation), Operating Profit (EBIT) as well asProfit Before Tax, and Profit Before Tax Margin (%).

The profit and loss account shows the net profit during the year. It classifies profit into gross…

You have been asked to produce a Profit & Loss Statement for Bayford Fashion for the year to 31 March 2021, a business selling clothing both directly to UK retailers and online direct to consumers. Most of the product is imported from Asia. You have been provided with the information below from which you need to determine how to use for the production of the required statement. Amount & Further Information The company sells an average of 15,400 garments a month to retailers and 6,250 garments a month to online customers. The average selling price of each garment to retailers is £24 (excluding VAT) and £57.60 (including VAT at 20%) to online customers. The average cost of each garment is £9 including all import duties. Delivery and packaging costs to the customers average £0.5 per garment for retailers and £1.50 for online Item Sales Volume Pricing Unit Cost customers. Premises The premises are rented and cost £105,000 a month paid quarterly in advance on the 1st January, 1st April, 1st July and 1st October. The company has 55 employees with an average salary of £28,000 a year. During the year £12,000 in total was loaned to staff for various reasons and the balance was still Salaries outstanding at the year-end.

You have been asked to produce a Profit & Loss Statement for Bayford Fashion for the year to 31 March 2021, a business selling clothing both directly to UK retailers and online direct to consumers. Most of the product is imported from Asia. You have been provided with the information below from which you need to determine how to use for the production of the required statement. Amount & Further Information The company sells an average of 15,400 garments a month to retailers and 6,250 garments a month to online customers. The average selling price of each garment to retailers is £24 (excluding VAT) and £57.60 (including VAT at 20%) to online customers. The average cost of each garment is £9 including all import duties. Delivery and packaging costs to the customers average £0.5 per garment for retailers and £1.50 for online Item Sales Volume Pricing Unit Cost customers. Premises The premises are rented and cost £105,000 a month paid quarterly in advance on the 1st January, 1st April, 1st July and 1st October. The company has 55 employees with an average salary of £28,000 a year. During the year £12,000 in total was loaned to staff for various reasons and the balance was still Salaries outstanding at the year-end.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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