Use accounting and financial principles to support the operations of an organization.
ESS:
• Communication
• Numeracy
• Critical thinking & problem solving
• Information management
• Interpersonal Skills
This Week’s Detailed Case Study Information
Jackie has shared the most recent Statement of Income with you (see below). With her
accounting background, she found it easy to put it together. Kate, on the other hand,
struggles to make sense of it. While she understands what it takes to run the business, she is still
unsure about how the business is doing.
Kate has asked you to review the Statement of Income and prepare a presentation on the
state of the business. This presentation should include a year-over-year comparison of year 1
and year 2 and details on the bottom line (i.e. if the business is at a profit/loss and how much
money the business is making). Finally, both sisters would like you to provide a forecast for
year 3. What expenses can you expect to go up or down and by how much?
Deliverables for This Week’s Case Study
Create and record a presentation of the Statement of Income, including a year-over-year
comparison of year 1 and year 2, and a forecast of year 3.

statement of income

	YEAR 2	YEAR 1
REVENUES	$ 347,692	$ 309,716
COST OF SALES
Purchases	229,335	206,893
Discounts	22,135	19,659
Freight in and duty	3,797	3,239
Merchant Fees	5,774	4,571
Operating supplies	4,804	4,206
	265,845	238,568
Closing Inventory	(49,853)	(47,019)
	215,992	191,549
GROSS PROFIT	131,700	118,167
EXPENSES
Salaries and wages	51,432	50,528
Rental	25,466	23,634
General & Administrative	6,521	7,567
Office	1,705	1,771
Professional fees	2,800	2,691
Bank charges	662	602
Advertising and promotion	460	229
Utilities	1,316	2,413
Meals and entertainment	750	839
Repairs and maintenance	65	-
Insurance	1,301	1,191
	92,478	91,465
INCOME/(LOSS) FROM OPERATIONS	39,222	26,702
Amortization	5,622	5,459
Interest	1,626	1,519
NET INCOME/(LOSS)	$ 31,974	$ 19,724