Chapter 2 Statement of Comprehensive Income
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bwimeeeChapter 2 Statement of Comprehensive Income
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bwimeeeChapter 2
Statement of Comprehensive Income
PROBLEM 1: TRUE OR FALSE
1. FALSE
2. FALSE
3. TRUE
4. FALSE
5. FALSE
PROBLEM 2: FOR CLASSROOM DISCUSSION
1. C
2. D
3. D
4. D
5. D
6. B
7. Solution:
Requirement (a):
Lunch Co.
Statement of profit or loss and other comprehensive income
For the year ended December 31, 20x1
Notes
Sales 22,000,000
Cost of goods sold 12 (6,000,000)
Gross profit 16,000,000
Distribution costs 13 (2,230,000)
Administrative expenses 14 (3,050,000)
Impairment loss on financial assets (190,000)
Finance costs (340,000)
Profit before tax 10,190,000
Income tax expense (2,000,000)
Profit for the year 8,190,000
Other comprehensive income
Items that will not be reclassified subsequently:
Investments in equity instruments 200,000
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges 30,000
Other comprehensive income for the yr., net of tax 230,000
TOTAL COMPREHENSIVE INCOME FOR THE YR. 8,420,000
Requirement (b):
Note 12: Cost of goods sold
This line item consists of the following:
Beginning inventory 1,700,000
Purchases 5,600,000
Purchase returns (500,000)
Freight in 400,000
Total goods available for sale 7,200,000
Ending inventory (1,200,000)
Cost of goods sold 6,000,000
Note 13: Distribution costs
This line item consists of the following:
Salaries of sales personnel 670,000
Advertising expense 320,000
Rent expense (280,000 x ½) 140,000
Commission expense 1,100,000
Distribution costs 2,230,000
Note 14: Administrative expenses
This line item consists of the following:
Research and development expense 180,000
Directors' remuneration 2,000,000
Salaries of administrative personnel 520,000
Rent expense 140,000
Depreciation expense 160,000
Insurance expense 50,000
Administrative expenses 3,050,000
PROBLEM 3: EXERCISE
1. Solutions:
Requirement (a):
Dinner Co.
Statement of profit or loss and other comprehensive income
For the year ended December 31, 20x1
Notes
Sales 16,800,000
Cost of goods sold 12 (8,390,000)
Gross profit 8,410,000
Distribution costs 13 (3,090,000)
Administrative expenses 14 (2,910,000)
Impairment of property, plant and equipment (290,000)
Finance costs (280,000)
Profit before tax 1,840,000
Income tax expense (552,000)
Profit for the year 1,288,000
Other comprehensive income
Items that will not be reclassified subsequently:
Revaluation decrease during the period (120,000)
Items that may be reclassified subsequently to profit or loss:
Translation gain on foreign operation 25,000
Other comprehensive income for the yr., net of tax (95,000)
TOTAL COMPREHENSIVE INCOME FOR THE YR. 1,193,000
Requirement (b):
Note 12: Cost of goods sold
This line item consists of the following:
Beginning inventory 2,100,000
Purchases 6,800,000
Purchase returns (480,000)
Freight in 350,000
Total goods available for sale 8,770,000
Ending inventory (380,000)
Cost of goods sold 8,390,000
Note 13: Distribution costs
This line item consists of the following:
Freight out 870,000
Sales commissions 480,000
Marketing expense 320,000
Salaries of sales personnel 670,000
Rent expense 210,000
Depreciation expense 540,000
Distribution costs 3,090,000
Note 14: Administrative expenses
This line item consists of the following:
Salaries of administrative personnel 2,520,000
Rent expense 210,000
Depreciation expense 180,000
Administrative expenses 2,910,000
