# Unit Six The Calculation of Profit

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Unit Six The Calculation of Profit

Learning goals 1. Understanding the concept of the profit
2. Getting to know the items of profit 3. Learning to set profit account 4. Learning how to balance down the current year profit account and calculate business income tax

Case After one month’s hard work, A Ming and A Hua have earned some money for their ice-cream. A Hua: We earned a lot of money this month. A Ming: Yes, that’s true. But you know that is a big expense for our material, labors, water and electric. A Hua: Yes, we have worked for a month, now let’s account our bill, we can calculate how much we have earned. A Ming: OK. Don’t make mistake. Let’s start.

1.Earnings brought forward
Dr.: Income from main operations Income from other operations Non-operating income Income from investment Cr.: Profit

2. Cost and expenses brought forward
Dr.: Profit Cr.: Operating costs Sales tax and additional expense Other operating expenses Non-operating expenses Sales expense Overhead Financial costs Income tax

1. Calculate the tax 2. Pay tax Dr.: Income tax
Cr.: Tax payable — income tax payable 2. Pay tax Dr.: Tax payable — income tax payable Cr.: Bank deposit

Accounting Terms Net Profit 利润 Gross Profit 利润总额 Taxes Payable 营业利润

Listen to the tape and fill in the following blanks
A Hua: Be sure to distinguish every kind of A Ming: we earned need to be calculated correctly. And then based on this, the income tax is paid. A Hua: It seems that we can enjoy the reduced tax as we open the ice-cream shop now. A Ming: Right, because we are A Hua: This should contribute to of the government for A Ming: So, we must do better. The nation supports us to start business and we need to make it better, bigger and stronger. A Hua: When we earn more money, I also want to hire more employees to enlarge our business. A Ming: I hope your dream can come true. But now, we need to be practical. A Hua: You are right. A Ming: Let’s work hard together to ensure our ice-cream shop well managed. profit Profits a mini-sized company the beneficial policies paying taxes

Multiple choice 1. How many kinds of revenue are there?
A. The income for selling goods B. The income for offering service C. The income for transferring assets D. The income for selling fixed assets 2. Gross profit includes A. business income B. tax income C. non-operating income D. non-operating expenses

True or False 1. The income must be the increase in assets. ( )
( ) 2. The enterprise should confirm the revenue when handing the ownership evidence or the stuff to the opposite party.