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Profit and loss account help needed

  • 02-12-2010 6:07pm
    #1
    starface
    Registered Users, Registered Users 2 Posts: 243 ✭✭


    I'm confused.

    I'm in the process of doing an assignment. I've prepared the cash budget without much problem and now I've moved on to the P&L account. The company is a travel agents so they are providing a service so am I right in assuming there is no opening or closing stock to be included in P & L account?. SO... what layout will the P& L account take now??...sales less cost of sales?

    Am I just completely missing the opening and closing stock in the question somewhere?Does every P&L account have to have an opening and closing stock? Any help on this would be really appreciated. It's really beginning to bug me because I know I'm just overlooking something very minor.


Comments

  • #2
    Toblerone1978
    Registered Users, Registered Users 2 Posts: 684 ✭✭✭Toblerone1978


    starface wrote: »
    I'm confused.

    I'm in the process of doing an assignment. I've prepared the cash budget without much problem and now I've moved on to the P&L account. The company is a travel agents so they are providing a service so am I right in assuming there is no opening or closing stock to be included in P & L account?. SO... what layout will the P& L account take now??...sales less cost of sales?

    Am I just completely missing the opening and closing stock in the question somewhere?Does every P&L account have to have an opening and closing stock? Any help on this would be really appreciated. It's really beginning to bug me because I know I'm just overlooking something very minor.

    I presume there's a decent possibility that a travel firm could have WIP (work in progress). If there is no WIP, sales less cost of sales to give gross profit sounds okay to me.


  • #3
    edson
    Registered Users, Registered Users 2 Posts: 246 ✭✭edson


    Toblerone1978 wrote: »
    I presume there's a decent possibility that a travel firm could have WIP (work in progress). If there is no WIP, sales less cost of sales to give gross profit sounds okay to me.

    why would they have WIP? i would doubt that they'd have any stock at all....


  • #4
    starface
    Registered Users, Registered Users 2 Posts: 243 ✭✭starface


    I was considering WIP but from the statement provided there doesn't appear to be any.

    Thanks for the replies!!:o


  • #5
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    A travel agency will not have trade stock as it is a service company.

    So your gross profit will be Sales less cost of goods sold.

    Sales being punters in off the street to lazy to use the internet and cost of goods sold will be charges from owners of unfinished hotels in spain. :p


  • #6
    Toblerone1978
    Registered Users, Registered Users 2 Posts: 684 ✭✭✭Toblerone1978


    edson wrote: »
    why would they have WIP? i would doubt that they'd have any stock at all....

    I doesn't mean WIP in the physical stock sense. For example, most accountancy and solicitor firms would have WIP at their year-end i.e. work done at year-end but not billed for (it might be also referred to as accrued income). They may or may not this WIP in their accounts.

    I though a travel agency might have a similar type WIP.


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