Page 120 - Agri-Business Management Handbook

Let us see how his statements of profit and loss, cash flows and financial position will
be presented for each of the three days.

Income Statement for Monday

Sh Note:

Sales 4,500 It is only the cost of the tomato
Cost of goods sold (½ x 2,000 sauces that were sold that is
4,000) 2,500 deducted from the sales made and
not all the stocks or inventories of
Profit tomato sauces. The inventories will
be deducted from the sales during
the day that they will be sold.

Statement of Cash Flows for Monday Statement of Financial Position on Monday
Evening

Sh Sh

Capital by Joseph 10,000 Cash (closing balance) 10,500

Cash sales 10,000 Inventory (x 4,000) 2,000

Cash paid to buy 10,000 Total assets 12,500
inventories
Capital contributed 10,000

Closing balance of cash 10,500 Profit 2,500
Capital & profit 12,500

Using the same principles, we can prepare the statements for Tuesday and
Wednesday.

Income Statement

Sales Monday Tuesday Wednesday
Sh. Sh. Sh.
4,500 4,800 3,200

Cost of goods sold 2,000 4,000 2,300

Profit 2,500 800 900

63AGRI-BUSINESS MANAGEMENT HANDBOOK |