Note

Sales 1 ₱39,400,000
LESS: COGS 2 (13,000,000)
Gross Income ₱26,400,000

Other Income 3 8,380,000

Total Income ₱34,780,000

LESS: Expenses
Distribution Cost 4 3,640,000
Administrative Expense 5 4,360,000
Other Expense 6 3,700,000
Finance Cost 7 500,000
Total Expenses (₱12,200,000)

Other Losses 8 (2,700,000)

Income Before Tax ₱19,880,000

LESS: Total Income Tax Expense 9 (2,200,000)
Income After Tax ₱17,680,000

ADD: Income From Discontinued Operation 10 420,000

Profit Or Loss ₱18,100,000

Other Comprehensive Income 11 10,300,000

Total Comprehensive Income ₱28,400,000
NOTE 1: SALES

Sales ₱ 40,000,000
LESS: Sales discount and allowance (400,000)
Sales return (200,000)

TOTAL SALES ₱39,400,000

NOTE 2 COST OF GOOD SOLD

Purchases of Raw Materials ₱10,000,000

Freight In on Raw Materials 300,000
Purchase discount and allowance on Raw Materials (300,000)
Purchase return (500,000)
TOTAL DIRECT MATERIALS 9,500,000
Direct Labor 1,000,000
Factory Overhead – 50% of Direct Labor 500,000
TOTAL MANUFACTURING COST 11,000,000
Raw Materials, January 1 2,000,000
Raw Materials, December 31 3,000,000
COST OF GOOD MANUFACTURED 10,000,000
WIP, January 1 1,500,000
WIP, December 31 (2,500,000)
COST AVAILABLE FOR SALE 9,000,000
Finished Goods, January 1 5,000,000
Finished Goods, December 31 (3,000,000)
Depletion of Wasting Asset 2,000,000
COST OF GOOD SOLD ₱13,000,000

NOTE 3 OTHER INCOME

Gain on sale of Non-current Asset Held for sale, before tax ₱400,000
Gain on factoring of Accounts Receivable 400,000
Gain on changes in Fair Value less cost to sell of Biological Assets 1,000,000
Cash and property dividend received from Investment in SMC @ cost method 300,000
Interest received from Investment in Held to Maturity Securities 300,000
Amortization of Premium on Held to Maturity Securities (20,000)
Realized gain on sale of Investment Property 100,000
Realized deferred income from government grant 400,000
Gain on debt restructuring – asset swap 200,000
Gain on debt restructuring – equity swap 300,000
Gain on debt restructuring – modification of terms (5% of original liability) 100,000
Gain on sale and leaseback – operating lease 300,000
Unrealized holding gain on derivatives designated as fair value hedge 100,000
Unrealized holding gain on derivatives designated as cash flow hedge (ineffective) 200,000
Realized gain on derivatives designated as hedge of net investment
in Foreign operation (effective) 300,000
Transaction gain from foreign exchange transaction 500,000
Unrealized holding gain on Trading Securities 2,000,000
Realized gain on sale of FAFVOCI Debt Instruments 1,500,000

TOTAL OTHER INCOME ₱8,380,000

NOTE 4 DISTRIBUTION COST

Warranty Expense ₱500,000

Premium Expense 200,000
Compensation Expense – Share appreciation rights 200,000
Freight Out 200,000
Sales Commission 100,000
Salary of Marketing Department’s employees 100,000
Advertising Expense 500,000
Depreciation on Property, Plant and Equipment 1,200,000
Employee Benefit Expense 40,000
Office Supplies used 50,000
Rental Expense on Main building 500,000
Utilities Expense 50,000

TOTAL DISTRIBUTION COST ₱3,640,000

NOTE 5 ADMINISTRATIVE EXPENSE

Bad debts expense ₱100,000

Compensation Expense – Share Options 100,000
Salary of legal counsel 500,000
Salary of directors and executives 900,000
Salary of accounting department 200,000
Depreciation on Property, Plant and Equipment 1,800,000
Employee Benefit Expense 160,000
Office Supplies used 50,000
Rental Expense on Main building 500,000
Utilities Expense 50,000

TOTAL ADMINISTRATIVE EXPENSE ₱4,360,000

NOTE 6 OTHER EXPENSES

Impairment loss on Non-current Asset Held for Sale, before tax ₱300,000
Loss on Notes Receivable Discounting 100,000
Realized loss on sale of Investment in Held to Maturity Securities 400,000
Loss on changes in far value of Investment Property 500,000
Pre-organization cost 200,000
Research and development cost 300,000
Loss on sale and leaseback – finance lease 400,000
Expense from Law Suit 500,000
Extraordinary loss from calamity 300,000
Unrealized holding loss from FLFVPL – not due to credit risk 200,000
Realized loss on sale of Trading Securities 500,000

TOTAL OTHER EXPENSES ₱3,700,000

NOTE 7 FINANCE COST

Interest Paid on Bonds Payable ₱200,000

Amortization of Discount on Bonds Payable 50,000
Amortization of Bonds Payable Issue cost 50,000
Interest Expense on Finance Lease 200,000

TOTAL FINANCE COST ₱500,000

NOTE 8 OTHER LOSSES

Impairment loss on Loans Receivable ₱200,000

Share in net loss from Investment in BDO @ equity method 500,000
Loss on sale of an item of Property, Plant and Equipment 1,000,000
Impairment loss of Property, Plant and Equipment 500,000
Amortization of Intangible Asset 400,000
Realized loss on derivatives designated as cash flow hedge (effective) 100,000

TOTAL OTHER LOSSES ₱2,700,000

NOTE 9 INCOME TAX EXPENSE

Deferred Tax Expense ₱1,200,000

Current Tax Expense 2,000,000

TOTAL INCOME TAX EXPENSE ₱ 2,200,000

NOTE 10 INCOME FROM DISCONTINUED OPERATION

Revenue from discontinued operation, before tax ₱1,000,000

Realized gain on sale of assets of discontinued operation, before tax 400,000
Expenses from discontinued operation, before tax (500,000)
Impairment loss of assets of discontinued operation, before tax (300,000)

INCOME FROM DISCONTINUED OPERATION 600,000

Multiply by: x 70%
TOTAL INCOME FROM DISCONTINUED OPERATION ₱420,000

NOTE 11 OTHER COMPREHENSIVE INCOME

OCI WITH RECLASSIFICATION

Unrealized holding loss from FLFVPL – due to credit risk ₱400,000

Unrealized holding loss on derivates designated
as cash flow hedge (effective) 300,000
Unrealized holding gain on derivatives designated as hedge
of net investment in Foreign operation (effective) 500,000
Translation adjustment debit – Foreign Operation 2,000,000
Unrealized holding gain on FAFVOCI Debt Instruments 2,000,000

TOTAL OCI WITH RECLASSIFICATION 5,200,000

OCI WITHOUT RECLASSIFICATION

Unrealized holding loss on FAFVOCI equity instrument ₱3,000,000

Net Remeasurement Gain or Actuarial Gain under Defined Benefit Plan 100,000
Increase in Revaluation Surplus during 2011 2,000,000

TOTAL OCI WITHOUT RECLASSIFICATION 5,100,000

TOTAL OTHER COMPREHENSIVE INCOME ₱10,300,000