p5 unit 2 business

Topics: Generally Accepted Accounting Principles, Balance sheet, Liability Pages: 2 (1180 words) Published: November 4, 2014

In this I will be explaining the profit and loss of the Domestic Dog Homes along with the explanation of the balance sheet of Domestic Dog Homes. The profit and loss account is a type of business information which companies or Domestic Dog Homes (DDH) can use to see the financial performance of their company over a certain time period. The profit and loss account shows the sales, cost of sales, gross profit and net profit from the DDH trading accounts it shows that DDH made of gross profit of £33,000 without taking into other accounts such as costs of sales, stock etc… the profit and loss account also shows that DDH made a net profit of £11,600. DDH make their sales by selling their stock/ their products, DDH specialise in selling dog beds, such as dog tents for owners to go camping with their dogs or incontinence beds for mature dogs which do not leak and can be washed every day for a year. These specialist products allow DDH to make sales which keep them in business from their competitors such as pets at home due to DDH having the specialist product allow them to carry on making sales. However there is also the cost of sales the cost of buying all the merchandise if retail or the cost of manufacture and supply of the products, from the loss account, DDH cost of sale was £32,000. This also links in with the opening stock DDH have and how much it will cost them. All companies including DDH need to have an opening stock for them to make initial sales where they can then order in more stock. However this does cost some money and it cost DDH £4,000. However this cost can be lowered with closing stock, closing stock is stock that is left over from a certain period or term. The closing stock for DDH was £5,000 which lowered the cost of opening sales and stock which was £36,000 but is now £31,000. Gross profit is the difference between all the revenue gained and the cost of producing goods or services sold. For DDH their gross profit was £33,000 DDH profit was...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Unit 2 Mock Assignment P5 P7 M3 D2 Essay
  • Essay on Unit 2 Business Betc
  • Unit 2 P5 Essay
  • unit 2 Essay
  • unit 2 business resources p1 Essay
  • Essay about Unit 2 P7
  • p3 unit 2 business Essay
  • Unit 2 P4 Business Studie Essay

Become a StudyMode Member

Sign Up - It's Free