SAN LUIS EDUCATIONAL FOUNDATION, INC.

LEARNING ACTIVITY
SHEET

Business Mathematics
First Semester

Lesson 6:
FINANCIAL REPORTS

NAME: _____________________________________________________

GRADE & SECTION: 11 – ST. MARTIN DE PORRES WEEK NO. 1

DATE OF SUBMISSION: November 22, 2021 SCORE:

 SCHOOL YEAR: 2021 – 2022

A Prayer Before Study

by St. Thomas Aquinas

Lord, true source of light and wisdom.

Give me a keen sense of understanding
A retentive memory and the capacity
To grasp things correctly.
Grant me the grace to be accurate in my
expositions
And the skill to express myself with
Thoroughness and clarity.
Be with me at the start of my work.
Guide its progress and bring it to completion.
Grant this through Christ, our Lord.
AMEN.

INSTRUCTIONS:

Answer the following activities below. Show your solutions by applying what
you have learned about Financial Reports. Follow the given instructions for
you not to be confuse and finish the following activities easily on this
Learning Activity Sheet.
Feel free to contact me through text/call or messenger if you have any
questions regarding the lessons.
Mobile number: 09759562128 Facebook Account: Angela Odtohan
Vergara

LEARNING GOALS & TARGETS

CONTENT The learner demonstrates understanding of the key concepts

STANDARD of Financial Reports
PERFORMANCE The learner is able to formulate real-life problems involving
STANDARD financial reports.
LEARNING  The learners will know the income statement.
COMPETENCIES
  Compute the net income, gross profit, and net profit.
 Preparing an income statement.

ENRICH LEARNING

THE INCOME STATEMENT

The income statement is a financial report that tells how much a business
earned or lost during a specific period of time. The income and expenses of the
business are summarized in the statement. This statement shows the amount of
revenues (sales), the costs and expenses (operating expenses) incurred, and the net
income (profit) for a certain period of time, such as one month, three months (one
quarter) or one year.

The basic formulas/equations of the income statement are:

FORMULA
Net Income Revenues – Operating Expenses
(Profit) (Sales) (Costs and Expenses)
Gross Profit Net Sales – Cost of Goods Sold

Net Profit Gross Profit – Operating Expenses

The income statement contains five (5) major sections, namely, revenues or
sales, the cost of goods sold, the gross profit from sales, the operating expenses, and
the net income or profit.

DEFINITION OF TERMS
The revenues or sales represent the total sales earned by the business,
whether in cash or in credit, less the sales discounts, sales returns, and allowances.
Sales discounts are discounts (reductions) in price given by the business to
costumers as a gesture for early or prompt payment of accounts. Sales returns
represent the goods that are returned or sent back to the supplier due to product
defects, low quality of materials used, non-compliance with the contract
specifications, and the like. The damaged goods that are kept by the buyer at a
reduced price are called sales allowance.

The gross sales are the total sales made by the business before the total sales
returns, the discounts, and the allowances are deducted.

The cost of goods sold represents the total cost spent by the business in
acquiring the goods that are sold.
 The process of counting the remaining goods and obtaining the price based
on the purchase price of the goods is known as inventory. Merchandise inventory
accounts for the cost of inventory or the goods on hand at any specific period of
time. The beginning inventory shows the cost of goods before the period, while the
ending inventory presents the cost of goods at the end of the said period.

The gross profit from sales are represented by the net sales minus the cost of
goods sold for the specific period of time.

The expenses incurred in operating the business are called operating

expenses. Examples of expenses incurred in operating a business include salaries
and allowances paid to employees, insurance, taxes, utilities, delivery expenses,
depreciation of a building and equipment, cost of selling and advertising, office
supplies and miscellaneous expenses.

The net income shows the profit earned by the business for the period
specified in the financial statement. It is calculated by obtaining the difference
between the gross profit and the operating expenses.

PREPARING AN INCOME STATEMENT

Let us now discuss specific examples to understand and illustrate the different parts
of and how to prepare a financial income statement.

Examples:
1. Prepare an income statement for ABC Store for its first quarter operation for
2008 base on its reported information as follows: Revenues (sales) -
₱180,000; Cost of goods sold – ₱100,000; Operating expenses – ₱30,000.

Solution

ABC Store
Income Statement
For the First Quarter Ended 31 March 2008

Revenues (Sales) ₱180,000.00

Less: Cost of Goods Sold 100,000.00
Gross Profit from Sales ₱80,000.00
Less: Operating Expenses 30,000.00
Net Income (Profit) ₱50,000.00
 2. BCD Supermarket reported the following financial information for its January
2008 Income Statement: Net Sales, ₱1,750,300.00; Cost of Goods Sold,
₱1,200,700.00; Operating Expenses ₱375,900.00. Find its net profit for the
month.

Solution

Net Sales ₱1,750,300.00

Less: Cost of Goods Sold 1,200,700.00
Gross Profit ₱549,600.00
Less: Operating Expenses 375,900.00
Net Income (Profit) ₱173,700.00

INCOME STATEMENT
Solve the following problems completely. Show the formulas and all the pertinent
solutions on this sheet.
1. JOM Store reported the following information on its first quarter income
statement for the year 2008: net sales, ₱85,600.00; cost of goods sold,
₱33,500.00; and operating expenses, ₱10,670.00. Find its net profit for the
quarter.

2. Helen’s Supermarket reported the following financial information for its

December 2009 Income Statement: Net Sales, ₱1,830,400.00; Cost of
Goods Sold, ₱1,550,300.00; Operating Expenses ₱165,800.00. Find its net
profit for the month.

Prepared by

ANGELA O. VERGARA
Math Teacher