HELP - Cash Management - Case study

Jentel

:confused1: Can anyone help me with Page 64 of the osborne book. The case study for Jean-E-Us, I have done the required tasks but i am struggling to do the 'Profit & loss a/c'. For the 'cost of goods sold' i am trying to work out how they came to this using the long way round, e;g - open stock + purchases - closing stock. I am unable to get the figures that would have been used for these. I can't find another simular example in the book.

Paul24

As a starting point, the closing stock would be found on the previous periods balance sheet? Difficult without the question in front of me. Can you not work out the purchases made from the creditors figures, or do you not have comparative statements?

Jentel

I do have the balance sheet for the previous period. I would need the opening stock figure also to work this out. Where would i get that from. I a new to this topic

speegs

Surely opening stock for the current period would just be the closing stock from the previous period. That being the case, you could get this figure from the previous perdios balance sheet or p & l account I would imagine.

Hope that helps.

Jentel

Getting even more confused. I think it would help if someone has actualy done the task. Not meaning to sound rude. If someone can just me where to get or give me the figures then i hope i can work it out... Not covered this sufficiently in class as it was just brushed over, so struggling

Speegs - i am trying to do the P & L a/c.

speegs

Oh OK - Sorry. :001_unsure:

Richard

If you look at the information you are given on page 64, you will see that it costs £19.70 to produce one pair of jeans. The forecasted sales for the period are: Jan 2200 pairs, Feb 2500 pairs and Mar 2800 pairs.

This produces a total of 7,500 pairs of jeans sold, we also know that the jeans sell for £25 per pair.

Using all of this information, the forecasted P&L would be:

Sales - 7,500 x £25 = 187,500

less:
Cos - 7,500 x £19.70 = 147,750

Operating Profit = 39,750.