Name: Ernie Jane G.

Villanueva Date: February 12,2022

Topic # 3: Others Topic “Statement of Comprehensive income”

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31,2022

Net Sales XX
Less: Cost of Good sold XX
GROSS PROFIT XX
Add: Other Income XX
Less: OPEX XX
PROFIT BEFORE TAX XX
Less: Tax expense XX
INCOME FROM CONTINUING XX
Add: Income from discontinued XX
NET INCOME XX
Add/less: Other comprehensive income XX
COMPREHENSIVE INCOME XX

 HOW TO GET NET SALES???

Gross sales XX
Less: sales discount XX
Sales return XX
Sales allowance XX
NET SALES XX

 HOW TO GET COST OF GOOD SOLD-MERCHANDISING???

Beginning Inventory XX
Add: Purchases XX
Purchase discount XX
Purchase return XX
Purchase allowances XX
Less: Ending Inventory XX
COST OF GOOD SOLD XX

 HOW TO GET COST OF GOOD SOLD-MANUFACTURING??? Purchases XX

Add: Freight in XX
Less: P-discount XX
P-return XX
P-allowances XX
NET PURCHASES XX
 NORMAL COSTING
Direct labor X
Raw material, Beg. XX Times: Pre-determine OH rate X
Add:Net purchases XX OVERHEAD APPLIED X
Less: Raw material, ends XX
RAW MATERIAL USED XX
Add: Direct labor XX
Overhead Cost XX
MANUFACTURING COST XX ACTUAL COSTING
Add: Work in process ,Beg. Xx Indirect material x
TOTAL GOODS PUT IN PROCESS XX Indirect labor x
Less: Work in process, end XX Factory supervision x
COST OF GOODS MANUFACTRED XX Factory taxes x
Add: Finished goods, beg. Xx Depre. Factory equip. x
TOTAL GOODS AVAIBLE FOR SALE XX Depre. Factory Bldg. x
Less: Finished goods,end XX Heat.light and power x
COST OF GOOD SOLD XX Factory Insurance x

HOW TO GET GROSS PROFIT??? Maintenance factory x
Rent of factory Bldg. x
Sales XX Repair of factory equip. x
Less: Cost of good sold XX
GROSS PROFIT XX

 HOW TO GET OTHER INCOME???

Rent income XX
Interest income XX
Commission income XX
Gain on sale XX
Gain on retirement XX
Recovery from insurance XX
Investment income XX
Unrealized gain loss-PL XX
TOTAL OTHER INCOME XX

 HOW TO GET OPERATING EXPENSE???

The OPEX has 5 natures namely:

 Cost of Good sold

 General and administrative
 Selling expense
 Finance cost
 Other expenses

Cost of Good sold

-Determine the Direct labor, material and overhead {gagastusin mo inside the factory}
General and administrative

-Gagastusin mo to administer the company…If ang gagastusin mo ay nasa loob ng opisina ni

company kung saan sila nag memeeting , kung saan nag record, kung saan sila nag strategized, yan
yung general and administrative what are those?

 Salaries of office staff

 Salaries of officers (e.g..,vice president)
 Depreciation of office equipment, building
 Rent of office building
 Office supplies
 Audit fee, accounting fee, legal fees
 Bad debts expense
 Insurance expense (kung ininsure mo factory…Overhead…

pag office…General and Administrative

pag store…Selling, but if the problem is silent used GAA)

Selling expense

-Ginagastos sa labas ng opisina,sa labas ng factory,ito yung ginagastos mo para makapag benta
ka sa loob ng store mo, what are those?

 Salaries of store employees (sales dept.)

 Depreciation of store equipment, building
 Rent of store building
 Freight out to customer
 Advertising and marketing expense
 Commission expense

Finance Cost

-Related sa interest, sa bonds,notes loans,,,etc…so what are those?

 Interest expense
 Discount lost

Other expenses

-the word “OTHERS” not CGS,GAA,SE,FC…it means not continues na ginagastos, bihira mo lng sya
na iincured lagi, so what are those?

 Loss from casualties (e.g..,storm, flood)

 Loss on sale of PPE
 Loss on retirement of debt
 Research and development
  HOW TO GET PROFIT BEFORE TAX???

Net Sales XX
Less: Cost of good sold XX
GROSS PROFIT XX
Add: Other income XX
Less: OPEX XX
PROFIT BEFORE TAX XX

 HOW TO GET TAX EXPENSE?

Profit before tax XX

Times: tax rate XX
TAX EXPENSE XX

PROBLEMS:

Spades Company provided the ff. information for the year ended December 31,2022:

Sales 8,000,000 Net sales

Sales salaries 520,000 Selling expense

Advertising 120,000 Selling expense

Indirect labor 600,000 OH-CGS

Selling expense
Delivery expense 160,000

Freight in 80,000 DM-CGS

Depreciation-Machinery 50,000 OH-CGS

Factory taxes 130,000 OH-CGS

Purchases 1,600,000 DM-CGS

Direct labor 1,480,000 DL-CGS

Factory supplies expense 120,000 OH-CGS

Gen. Admn
Office supplies expense 30,000
Gen. Admn
Office salaries 800,000
OH-CGS
Factory superintendence 480,000
Gen. Admn
 Doubtful accounts 100,000

Factory maintenance 150,000 OH-CGS

Factory heat, light and power 220,000 OH-CGS

Tax expense
Income tax expense 170,000

Inventory balances at the end of fiscal period as compared with balances at the beginning at the
fiscal period were as follows:

Finished goods 200,000 decrease

Goods in process 90,000 decrease

Raw materials 100,000 increase

SOLUTION:

NET SALES

Sales 8,000,000

COST OF GOOD SOLD

 Raw material, Beg. 0

Add:Net purchases: 1,680,00

0

Freight in 80,000
Purchases 1,600,000

Less: Raw material, ends 100,000

RAW MATERIAL USED 1,580,000

Add: Direct labor 1,480,00

0

Overhead Cost 3,230,00

OPEX
0
>GENERAL AND
Indirect 600,000
ADMINSTRATIVE
Depreciation 50,000
Factory taxes 130,000 Office supplies expense
Factory supplies 120,000 30,000
Factory superin. 480,000
Factory maintenan. 150,000 Office salaries
Factory heat 220,000 800,000
MANUFACTURING COST 4,810,000 Doubtful accounts
Add: Work in process ,Beg. 90,000 100,000

TOTAL GOODS PUT IN PROCESS 4,900,00 TOTAL GEN ADM

0 930,000

Less: Work in process, end 0 >SELLING EXPENSE

Sales salaries
COST OF GOODS MANUFACTRED 4,900,00
520,000
0
Advertising
Add: Finished goods, beg. 200,000
120,000
TOTAL GOODS AVAIBLE FOR SALE 5,100,00
Delivery expense
0
160,000
Less: Finished goods,end 0
TOTAL SELLING EXPENSE
COST OF GOOD SOLD 5,100,00 800,000
0

TOTAL OPEX (930,000 + 800,000) = 1,730,000

 STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31,2022

Net Sales 8,000,00

Less: Cost of Good sold 5,100,000
GROSS PROFIT 2,900,000
Add: Other Income 0
Less: OPEX 1,730,000
PROFIT BEFORE TAX 1,170,000
Less: Tax expense 170,00
INCOME FROM CONTINUING 1,000,000
Add: Income from discontinued 0
NET INCOME 1,000,000
Add/less: Other comprehensive income 0
COMPREHENSIVE INCOME 1,000,000

1.What amount of cost of good sold for the current period?

Ans: 5,100,000

2.What amount of General and Administrative expense for the current year?

Ans: 930,000

3.What is the amount of selling distribution expense for the current year?

Ans: 800,000

4.What amount of net profit for the current period?

Ans: 1,000,000

NATURE OF EXPENSES-SELLING EXPENSE GEN. AD

5. Brock Corporation reports OPEX in 2 categories: Selling expense
1)selling, 2) GEN.AND ADM, .The adjusted trial balance Selling expense at
December 31 included the ff. expense and loss accounts:
Finance cost
Acc. And legal fees 120,000
Other expenses

Gen. Adm
Half of SE and GEN

Selling expense
 Advertising 150,000

Freight out 80,000

Interest 70,000

Loss on sale of long term investment 30,000

Officer’s salaries 225,000

Rent for office space 220,000

Sales salaries and commission 140,000

One Half of the rented premises is occupied by the sales department.

What is the total selling expense of Brocks?

ANS: 480,000

NATURE OF EXPENSES-GENERAL AND ADMINISTRATIVE

6.The ff. cost were incurred by Griff Co. a manufacturer,during 2021;

Accounting and legal fees 25,000 Gen Adm

Freight in 175,000 CGS

Freight out 160,000 Selling expense

Gen Adm
Officers salaries 150,000

Insurance 85,000 Gen Adm

Selling expense
Sales salaries and commission 215,,000

What amount should be reported as general and administrative expense in 2021?

ANS: 260,000

 HOW TO GET INCOME FROM DISCOUNTED (make sure I net of tax na ito)

SALES OF BUSINESS SEGMENT

Loss on sale of business segment XX

Impairment loss of business segment XX
Operating loss of business segment XX
Relocation of cost emloyees XX
INCOME FROM DISCONTINUED,GROSS XX
Tax expense ,benefit(100% less{if anong rate} X%
 INCOME FROM DISCONTINUED ,NET XX

January 1 to decided to sell Revenue and expense Included to discontinued operation

Decided to sell to sold Revenue and expense Included to discontinued operation
Sold the business segment Impairment Included to discontinued operation
Loss on sale
Relocation cost

PROBLEM

DISCONTINUED OPERATION-DISCONTINUED AT THE BEGINNING

7. Trunks company decided to discontinue its electronics division a separately identifiable component
of business. On December 31,2023 the division has not been completely sold. However negotiations
for the final and complete sales are progressing in a year . Analysis of the records for the year
disclosed the ff. relative to the electronics division:

Operating loss for the year 8,000,000

Loss of disposable of some electronics division asset during 2023 500,000

Expecting operating loss in 2024 preceding final disposal 1,000,000

Expected gain in 2024 in disposal of division 2,000,000

What amount should be reported as pretax loss from discontinued operation in 2023?

ANS: 8,500,000

Loss on sale of business segment 500,000

Impairment loss of business segment 0
Operating loss of business segment 8,000,000
Relocation of cost emloyees 0
INCOME FROM DISCONTINUED,GROSS 8,500,000
Tax expense ,benefit(100% less{if anong rate} 100%
INCOME FROM DISCONTINUED ,NET 8,500,000

DISCONTINUED OPERATION-DISCONTINUED DURING THE YEAR

8. On May 1,2022 Topak Company approved a plan to disclosed of a business segment .It is expected
that the sale will occur on March 1,2023. On December 31,2022 the carrying amount of net asset of
the segment was 2,000,000 and the fair value of 1,800,000. During 2022, the company paid employee
severance and relocation cost of 100,000 as a direct result of discontinued operation. Income tax reate
is 30% . The revenues and expenses of the discontinued segment during 2022 were:
 Revenue Expense

January 1 to April 30 1,500,000 2,000,000

May 1 to December 31 700,000 900,000

How much should be reported in discontinued operation for the year 2022?

Ans: 700,000

January 1 to decided to sell Revenue and expense Included to discontinued operation

1,500,000- 2,000,000
=500,000 (loss)

Decided to sell to sold Revenue and expense Included to discontinued operation

700,000-900,000
=200,000(loss)

Sold the business segment Impairment Included to discontinued operation

Asset 2,000,000
Fv 1,800,000
= 200,000
Loss on sale
0
Relocation cost
100,000

Loss on sale of business segment 0

Impairment loss of business segment 200,000
Operating loss of business segment 700,000
Relocation of cost emloyees 100,000
INCOME FROM DISCONTINUED,GROSS 1,000,000
Tax expense ,benefit(100% less{if anong rate} 70%
INCOME FROM DISCONTINUED ,NET 700,000

 HOW TO GET OTHER COMPREHENSIVE INCOME(make sure of net of tax)

OCI TO BE RECYCLED

Unrealized -Debt@ FVOCI XX

Unrealized -FS translation XX
 Unrealized – Cashflow hedge XX

OCI NOT TO BE RECYCLED

Unrealized - Equity @ FVOCI XX

Remeasurement gains and loss XX
Revaluation surplus XX
Financial liab, due to credit risk XX

PROBLEM:

Sham God Company provided the ff. information for the current year:

Income from continuing operation 4,000,000

Income from discontinued operation 500,000

Unrealized gain on financial asset- FVPL 800,000

Unrealized on loss equity investment-FVOCI 1,000,000

Investment gain on debit investment-FVOCI 1,200,000

Unrealized gain on future contract designated a cashflow hedge 400,000

Translation loss on foreign operation 200,000

Net “remeasurement “ gain on defined benefit plan during the year 600,000

Loss on credit risk if financial liability at FVPL 300,000

Revaluation surplus 2,500,000

9. What net amount should be reported as other comprehensive income for the current year?

Ans: 3,200,000

Investment gain on debit investment-FVOCI 1,200,000

Unrealized gain on future contract designated a cashflow hedge 400,000

Net “remeasurement “ gain on defined benefit plan during the year 600,000

Revaluation surplus 2,500,000

TOTAL 4,700,000

Less: Unrealized on loss equity investment-FVOCI 1,000,000

Translation loss on foreign operation 200,000

Loss on credit risk if financial liability at FVPL 300,000

 TOTAL 3,200,000

10. What amount should reported as comprehensive income for the current year?

Ans: 7,700,000

Net Sales 0
Less: Cost of Good sold 0
GROSS PROFIT 0
Add: Other Income 0
Less: OPEX 0
PROFIT BEFORE TAX 0
Less: Tax expense 0
INCOME FROM CONTINUING 4,00,000
Add: Income from discontinued 500,000
NET INCOME 4,500,000
Add: Other comprehensive income 3,200,000
COMPREHENSIVE INCOME 7,700,000

OCI RECYCLE TO PROFIT OR LOSS VS. OCI DIRECT TO RETAINED EARNINGS

Sher Company reported the ff. in the statement of comprehensive income for 2020:

Unrealized gain on trading securities 1,750,000

Unrealized loss on future contract designated as cash flow hedge 560,000

Revaluation surplus in 2020 2,500,000

Acturial gain on project benefit obligation 1,680,000

Exchange differences in translating foreign ope.-credit 750,000

Unrealized gain on equity investment at FVOCI 1,000,000

Unrealized gain on debt investment at FVOCI 1,500,000

11. What net amount may be subsequently recognized in profit or loss? {TIP: RECYCLE}

Ans: 1,690,000

Unrealized gain on debt investment at FVOCI 1,500,000

Exchange differences in translating foreign ope.-credit 750,000

TOTAL 2,250,000
Less: Unrealized loss on future contract designated as cash flow hedge 560,000

TOTAL 1,690,000

12. What net amount will not subsequently recognized in profit or loss? {Tip: Not recycle}

ANS:

Revaluation surplus in 2020 2,500,000

Acturial gain on project benefit obligation 1,680,000

Unrealized gain on equity investment at FVOCI 1,000,000

TOTAL 5,180,000

COMPREHENSIVE INCOME

Blame company provided the ff. information for the current year:

Net income 6,000,000

Unrealized loss on FVOTCI investments 500,000

Translation reserve-credit 600,000

Revaluation reserve 2,000,000

Accumulated profits adjustment-debit 100,000

Appropriated reserve 200,000

Gain on sale of treasury shares 150,000

13.What amount of comprehensive income should reported for the current year?

Ans:8,100,000

Net Sales 0
Less: Cost of Good sold 0
GROSS PROFIT 0
Add: Other Income 0
Less: OPEX 0
PROFIT BEFORE TAX 0
Less: Tax expense 0
INCOME FROM CONTINUING 0
Add: Income from discontinued 0
 NET INCOME 6,000,000
Add: Other comprehensive income 2,100,000
COMPREHENSIVE INCOME 8,100,000

Unrealized loss on FVOTCI investments 500,000

Translation reserve-credit 600,000

Revaluation reserve 2,000,000

Total 2,100,000