Income statement of Well Fit Garments Ltd.
The following information has been taken from the books of Well Fit Garments Ltd., for the financial year ending December 2021
Sock at 1 January 2021: $ 400
Number of garments sold: 120 units at $35 each
Purchases during the year: 60 units at $ 22 each
Closing stock valued at $ 600
Expenses:Rent $ 220, Salary $ 800,and Other overheads $ 50
Questions:
a) Define the following terms:
i. Cost of goods sold (COGS) [2 marks]
ii. Gross profit [ 2 marks]
iii. Net profit [ 2 marks]
iv. Income statement [ 2 marks]
b) Construct a profit and loss account for Well Fit Garments Ltd., for the year ended 31 December 2021. [ 6 marks]
c) Identify four stakeholders who would be interested in the profit and loss account of Well Fit Garments Ltd. [ 2 marks]