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Chapter 9 - Presentation of Fs (Statement of Comprehensive Income)

This document provides three problems with financial information for various companies and instructions to prepare statements of comprehensive income using different presentation methods (nature of expense and function of expense). For the first problem, financial information is given for Pooh Yatpa Corporation for 2018 and statements of comprehensive income are to be prepared using both presentation methods. The second problem provides sales, cost of goods sold, and expense information for Pahk Opya Company for 2016 and instructs to prepare a statement using the function of expense method. The third problem provides similar financial information for Aunt Toknako Company for 2017 and instructs to prepare a statement using the nature of expense method.

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226 views2 pages

Chapter 9 - Presentation of Fs (Statement of Comprehensive Income)

This document provides three problems with financial information for various companies and instructions to prepare statements of comprehensive income using different presentation methods (nature of expense and function of expense). For the first problem, financial information is given for Pooh Yatpa Corporation for 2018 and statements of comprehensive income are to be prepared using both presentation methods. The second problem provides sales, cost of goods sold, and expense information for Pahk Opya Company for 2016 and instructs to prepare a statement using the function of expense method. The third problem provides similar financial information for Aunt Toknako Company for 2017 and instructs to prepare a statement using the nature of expense method.

Uploaded by

Mark Ilano
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© © All Rights Reserved
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CHAPTER 9 – PRESENTATION OF FS (STATEMENT OF COMPREHENSIVE INCOME)

Problem 1
The following selected account balances were taken from the records of Pooh Yatpa Corporation for the year
2018:
Sales 7,800,000
Sales discounts 240,000
Sales returns 60,000
Purchases 5,200,000
Purchase discounts 140,000
Purchase returns 480,000
Freight in 50,000
Rent revenue 300,000
Dividend revenue 200,000
Interest expense 125,000
Income from associates 225,000
Loss from earthquake 85,000
Inventory, Jan. 1 1,000,000
Inventory, Dec. 31 1,400,000
Freight out 160,000
Salesmen’s commissions 640,000
Depreciation – store 140,000
Officers’ salaries 500,000
Depreciation – office 300,000
Income tax expense 640,000
Loss on sale of equipment 55,000
Loss on sale of financial assets through P/L 75,000
Loss on expropriation of land 90,000
Increase in revaluation surplus, net of tax 126,000
Holding losses on financial assets through OCI, (70,000)
net of tax benefit

Prepare a statement of Comprehensive Income in one-statement format for Pooh Yatpa Corporation for
the year ended Dec. 31, 2018 using the following presentations:

a.) Natural method (Nature of expense method)


b.) Functional method ( Cost of goods sold method)
Problem 2

Pahk Opya Company had sales during 2016 of P895,000. Pahk Opya’s gross profit percentage is 55%/

Purchases of inventory during 2016 totaled P466,250 and a count of inventory on hand at the end of the year
totaled P189,500. Selling expenses are 18% of sales and general and administrative expenses are equal to 80%
of selling expenses.

Pahk Opya’s income tax rate is 30% and the company has 60,000 ordinary shares outstanding.

a.) Statement of Comprehensive Income using Function of expense method

Problem 3

Aunt Toknako Company provided the following information for the current year 2017:

Sales 7,000,000
Sales return and allowances 100,000
Cost of goods sold 2,800,000
Utilities expense 1,000,000
Interest revenue 150,000
Income tax expense 800,000
Finance costs 200,000
Taxes and licenses 300,000
Freight out 90,000
Casualty loss due to earthquake 50,000
Salaries expense 600,000
Purchases 400,000
Loss on sale of investments 50,000

What is the total Comprehensive Income under:


a.) Nature of expense method

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