1. Do Now Activity: Answer the following questions:- 1.What is Profit? 2.What is Cost of Sales? 3.What is an Expense?

2. Activity: These are the items in an Income Statement. Sadly they are not in order – Put them in correct Order Any Business Income Statement (jumbled) Year ending 31 March 2020 = Net Profit125 Less Expenses175 = Gross Profit300 Revenue500 less Cost of Sales200

3. Any business Income Statement Year ending 31 March 2020 $'000's Revenue500 less Cost of Sales 200 Gross Profit300 Less Expenses175 Net Profit125

4. Sales: Income generated by a company's sales operations. Cost of Sales: The costs directly related to the purchase or production of whatever the company sells Gross Profit: Revenue/Sales minus the cost of goods sold. Expenses: The indirect costs incurred by a business that result from generating revenue. They include parts, wages, utilities, etc Net Profit: Gross profit less expenses in an accounting period. The Income Statement Purpose: Purpose: Shows the income and expenses (net profit) of the business for a period

5. Lifesystems is a small company selling First Aid packs. In 2020:- It sold $100,000 worth of ice packs. It cost them $30,000 to buy the packs. It paid $20,000 in wages, $3,000 in rent and $5000 in interest on a mortgage. Calculate:- 1.Gross Profit 2.Net Profit

6. Lifesystems is a small company selling ice packs for sporting injuries. In 2020:- It sold $100,000 worth of ice packs. It cost them $30,000 to buy the packs. It paid $20,000 in wages, $3,000 in rent and $5000 in interest. Activity: Create a full Income Statement for Lifesystems.

7. Lifesystems Income Statement Year ending 31 March 2020 Sales100,000 Less: Cost of Sales30,000 Gross Profit70,000 Less: Expenses Rent3,000 Wages20,000 Interest Expenses5,00028,000 Net Profit 42,000