Final answer:
To display sales of each service on separate lines in a QuickBooks profit and loss report, ensure each service is linked to a unique income account and record sales accordingly. Adjust any existing transactions if necessary. The example firm's accounting profit would be $50,000.
Step-by-step explanation:
To separate sales of each service on different lines in a profit and loss report in QuickBooks, you need to ensure that each service is set up as a separate product or service within QuickBooks. Then, when recording sales, you must allocate each sale to the correct service. If you've already set up the services but they are still appearing on one line, it's possible that the services are currently grouped under a single income account. To fix this, follow these steps:
- Go to the 'Lists' menu and select 'Products and Services.'
- Review your service items to ensure that they are each assigned to a unique income account.
- If they are all assigned to the same income account, edit each service. Go to the 'Income account' field and either select an existing income account specific to that service or create a new one.
- Ensure that all future transactions are recorded under the appropriate service.
After making these changes, run the profit and loss report again to see each service's sales on its own line. This will give you a clearer view of your income streams and allow for more detailed financial analysis.
If you have transactions that have already been recorded under a single account, you may need to edit those transactions to allocate them to the correct income accounts, or make general journal entries to adjust the accounts as needed.
The firm's accounting profit can be calculated by subtracting the total expenses (labor, capital, and materials) from the sales revenue. So, the accounting profit would be $1,000,000 - ($600,000 + $150,000 + $200,000) = $50,000.