Preparation and presentation of Statement of Profit or Loss

1. 
   Preparation and presentation of Statement of Profit or Loss
   

Periodic P&L. Every company should generate and examine its profit and loss statement at least once every three months. The profit and loss statement review aids in decision-making and the preparation of the business’s tax return. The P&L data will be used in your business tax return to calculate net income and the corresponding income tax that must be paid by your company.
Pro Forma P&L. A profit and loss statement must be produced when a new company first starts up. This statement was prepared pro forma, which means that it contains future projections.

Your first-year monthly budget (cash flow statement) and your tax advisor’s expected depreciation calculations provide the majority of the data for this statement.

Specifically, you will need:
A list of all the purchases made using your business credit cards as well as the transactions made in your business checking account.

Include all cash transactions, including petty cash, for which you have receipts.

For income, you will need a listing of all sources of income – checks, credit card payments, etc. These ought to be listed on your bank statement.
You will also require details on any sales-related price reductions, such as returns or discounts.
The profit and loss statement ought to be included with the usual reports if you’re using business accounting software. Even if you already have this report in your system, you should still be aware of the data needed to create it.

Whether you are writing a statement at startup, a tax return, or a business study, the preparation procedure and information required are the same. You will see a quarterly sum for each row, followed by a yearly total.

Start by listing your company’s net income (often referred to as “Sales”) for each quarter of the year. If you’d like to display revenue from various sources, you can segment the income into smaller parts.
2. Next, breakdown each quarter’s business expenses. Display the percentage of sales for each expense. The sum of all costs should equal 100% of sales.
3. Display as earnings the difference between sales and expenses. This is also known as EBITDA (earnings before interest, taxes, depreciation, amortization).

4. Subtract EBITDA from the total interest paid on your company’s debt for the year.

5. List (typically estimated) taxes on net income and then subtract.
6. Show the year’s total depreciation and amortization, then subtract it.
Your current figure represents net earnings, sometimes known as your company’s profit or loss.

2. 
   D
   

3.
Answer: 100/80=1.25

Mark up on cost is 25%

4.
Answer:

19000-9800-8000+4200=5400
Balance of Arthur’s capital account is 5400