Pre Workshop Questions

7.26 Tirthe Ltd sells a range of indoor and outdoor furniture by recycling and reinterpreting old furniture and other wood, metal, glass and plastic products obtained from a variety of sources such as derelict buildings, deceased estate auctions and so on. Revenue comes from sales to the general public and businesses such as hotels and restaurants. Some small items are collected by customers but generally goods are delivered by Tirthe Ltd. The directors have reported that it has been another good year for the organisation and that they expect the coming year to be successful.

The draft income statement for 2020 together with audited figures for 2019 are given below.

30 June 2020 30 June 2019 (draft) (actual) Revenue 536 994 617 140 Cost of sales (322 187) (302788) Gross profit 214 807 314352 Other income 7186 Operating expenses Administration (95 438) (92 064) Selling and distribution (50 575) (79 933) Finance costs (7434) (7 623) Profit/(loss) before tax 61 360 141918