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Sales: 1,000 COGS: 200 Gross profit: 70 Expenses: Rent 10 Wages 25 Utilities 5 Net profit: 30

Imagine a shop sells a pair of jeans for 100. The shop buy the jeans for 20 each. They sell 10 pairs of jeans (10 X 100 = 1,000) Cost of Goods Sold ( GOGS ), how much did it cost the shop to sell the jeans. Well they bought them for 20 each, they sold 10 so 10 X 20 = 200

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Sales: 1,000 COGS: 200 Gross profit: 70 Expenses: Rent 10 Wages 25 Utilities 5 Net profit: 30

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  1. Imagine a shop sells a pair of jeans for 100. The shop buy the jeans for 20 each. They sell 10 pairs of jeans (10 X 100 = 1,000) Cost of Goods Sold (GOGS), how much did it cost the shop to sell the jeans. Well they bought them for 20 each, they sold 10 so 10 X 20 = 200 The gross profit is how much is left after. Then they pay all their expenses What ever is left after paying all expenses is Net Profit Profit & Loss Account • Sales: 1,000 • COGS: 200 • Gross profit: 70 • Expenses: • Rent 10 • Wages 25 • Utilities 5 • Net profit: 30

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