Task Sheet 12

THE PROFIT AND LOSS ACCOUNT

Use task sheets 5 and 11 to help with this work.

The figures you need to enter refer to the sales and costs of the first issue of your magazine.
Use the lines to explain what the terms mean, and how they are calculated.

1. Sales Revenue for issue 1 £

Sales revenue is calculated by:

2. Cost of Sales

Variable production costs £ Ink, paper, staples, packaging

Promotion cost the cost of your free gift
£
Distribution cost £ the cost of using newsagents or mail order

Total cost of sales £

Explain the meaning of cost of sales

3. Gross Profit: calculated by:

Gross profit for issue 1 £

4. Fixed Costs

Factory Fixed Costs £ 100,000

Advertising £

Total Fixed costs £

5. Explain the meaning of fixed cost

6. Net Profit: calculated by:

Net profit for issue 1 £

7. Appropriation Account
The appropriation account shows what happens to a firm's
This can be 'appropriated' (used) in 3 main ways:
a) Corporation Tax
Paid to the Government on the firm’s profits. Assume it is at a rate of 25% = £
b) Dividends
Paid to shareholders. Assumed that 25% of profit is paid in dividends = £ c)
c) Retained Profit
Profit kept and reinvested by the firm. What is left after tax and dividends = £
8. Make a list of people or organisations who might be interested in Pepper’s Profit and Loss Account

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