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July Aug Sep Total Sales 50,000 60,000 90,000 200,000 50 Less: COGS 100/200 = 25,000 30,000 45,000 100,000 25,000 30,000 60,000 170,000 Gross Profit Less

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July Aug Sep Total Sales 50,000 60,000 90,000 200,000 50 Less: COGS 100/200 = 25,000 30,000 45,000 100,000 25,000 30,000 60,000 170,000 Gross Profit Less Bad Debts 2% 1,000 1,200 1,800 4,000 490 588 882 1,960 Discount Allowed Marketing Expenses Fixed 5,000 5,000 5,000 5,000 10 96 5,000 Variable 6,000 9,000 20,000 General&Adm. exp. 9,000 9,000 9,000 9,000 Interest expense 1,000 1,000 1,000 1,000 3,510 7,212 33,318 129,040 Income from operation Other Income Rent 2,000 2,000 2,000 2,000 X Net Profit 5,510 9,212 35,318 131,040 ** It is assumed that the 20% customer for discount allowance is the customer after bad debts It is not stated in the question but actually discount is allowed to customer who pays the amount Jul Aug 5500 9200 It can be taken as 20% of the sales value by other assumption Sep Total 35000 20300

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